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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 9, 1998
INTEGRATED SYSTEMS CONSULTING GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-28206 23-2528944
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
575 East Swedesford Road, Wayne, Pennsylvania 19087
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (610) 989-7000
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Item 5. Other Events
A. INTEGRATED SYSTEMS CONSULTING GROUP, INC. ANNOUNCES MERGER WITH
FIRST CONSULTING GROUP, INC.
On September 9, 1998, Integrated Systems Consulting Group, Inc.
announced an agreement to merge with and be acquired by First Consulting Group,
Inc. in a transaction to be accounted for as a "pooling of interests" and
intended to qualify as a tax-free reorganization. A press release relating to
the proposed transaction is attached hereto as Exhibit 99.1.
Item 7. EXHIBITS
99.1 News Release dated September 9, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Integrated Systems Consulting Group, Inc.
By: /s/ David D. Gathman
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David D. Gathman
Executive Vice President,
Finance and Administration
Chief Financial Officer and Secretary
Date: September 15, 1998
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For more information contact:
Luther Nussbaum, Executive Vice President, First Consulting Group
(562) 624-5220
Jim Reep, Chairman, President and CEO, First Consulting Group
(562) 624-5205
David Lipson, Chairman and CEO, Integrated Systems Consulting Group
(610) 989-7000
David Gathman, Executive Vice President, Integrated Systems Consulting Group
(610) 989-7000
First Consulting Group and Integrated Systems
Consulting Group to Merge
Combined Entities to Provide Broad Operations Improvement and Information
Management Services to the Converging Healthcare Services and Pharmaceutical
Industries
LONG BEACH, Calif. (September 9, 1998) - First Consulting Group, Inc. (NASDAQ:
FCGI), a leading provider of operations improvement and information management
services for the healthcare industry, and Integrated Systems Consulting Group,
Inc. (NASDAQ: ISCG), a leading provider of application development, document
management and network integration services predominately for the pharmaceutical
industry, today announced a definitive merger agreement.
This transaction, which is valued at $123.8 million based on Tuesday's
closing price of FCG's common stock and the approximately 9 million fully
diluted shares outstanding of ISCG common stock, will significantly enhance
FCG's breadth of coverage in the increasingly interrelated healthcare services
and pharmaceutical industries. It also strengthens the Company's application
development capability in client-server architecture, web-based applications,
object-oriented and relational databases, and cross-platform systems
integration.
The combined companies had a pro forma 1998 first half annualized
revenue run rate of $180.1 million and more than 1,300 employees as of June 30,
1998.
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Under the terms of the agreement, which is subject to approval of both
FCG and ISCG shareholders and customary closing conditions, each outstanding
share of ISCG common stock will be exchanged at a fixed exchange rate of 0.77
for a newly issued share of FCGI common stock. Completion of the merger is
expected in the fourth quarter of 1998. The parties expect the transaction,
which was unanimously approved by the boards of directors of both companies, to
be accretive to earnings per share, excluding one-time costs relating to the
merger.
"The next wave of healthcare will see increasing interaction among
genetic engineering, drug development, disease management and care delivery,"
said James A. Reep, FCG's chairman and chief executive officer. "This merger
gives us strong positions in each of the major worldwide healthcare services
segments: healthcare delivery, physician organizations, health plans, government
based healthcare, pharmaceuticals and biotechnology. ISCG gives us a major leap
forward to become a leader in the global 21st century integrated health and
human services industry," Reep added.
David S. Lipson, chairman and chief executive officer of ISCG
explained, "We think that the combination of FCG's broad industry expertise,
information technology strategic planning skills and program management methods
with ISCG's deep information technology skills will allow us to significantly
broaden the range and scope of our services. We are very pleased to have found a
partner with a similar corporate culture and an unquestioned commitment to
client satisfaction and results, employee development and practice research."
Upon completion of the transaction, James A. Reep will continue as
chairman, president and chief executive officer of the combined firm and David
S. Lipson will become vice chairman and managing director of the pharmaceutical
and life sciences practice.
The transaction is intended to be accounted for as a
pooling-of-interests and is intended to qualify as a tax-free reorganization.
Shareholders representing approximately 56.6% and 27% of the common stock
outstanding of ISCG and First Consulting Group respectively have signed
irrevocable proxies to vote in favor of the merger. FCG was advised by Hambrecht
& Quist LLC and ISCG was advised by Robert W. Baird & Co. Incorporated each of
which has rendered an opinion that the exchange ratio is fair to its respective
client shareholders.
The merged organizations will provide consulting, systems development
and integration, and management services to the healthcare services and
pharmaceutical industries through 27 offices serving North America and Europe.
The firm's services are designed to increase its clients' operations
effectiveness resulting in reduced costs, improved customer service, enhanced
quality of patient care and the more rapid introduction of new pharmaceutical
compounds.
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First Consulting Group Inc.
Integrated Systems Consulting Group, Inc.
Fact Sheet
<TABLE>
<CAPTION>
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First Consulting Group, Inc.
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<S> <C> <C>
Stock Symbol: FCGI
Top Management: James A. Reep, chairman & chief executive officer
Luther J. Nussbaum, executive vice president
Steven Heck, executive vice president
Thomas A. Reep, chief financial officer
Number of Offices: 23
Number of Employees: 707
Headquarters: Long Beach, California
Weighted Average Diluted Shares Outstanding: 15.372 million
1998 First Half Highlights: Net revenue: $60,386
Net income: $3,704
Earnings per share: $0.24
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Integrated Systems Consulting Group
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Stock Symbol: ISCG
Top Management: David S. Lipson, chairman, president & chief executive officer
Jay M. Rose, chief operating officer
David D. Gathman, chief financial officer
Number of Offices: 4
Number of Employees: 600
Headquarters: Wayne, Pennsylvania
Weighted Average Diluted Shares Outstanding: 9.045 million
1998 First Half Highlights: Revenues: $29,673
Net income: $2,206
Earnings per share: $0.25
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Except for the historical information contained herein, this news
release contains forward-looking statements, including, without limitation,
statements containing the words, "believes," "anticipates," "expects" and words
of similar import. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of FCG or ISCG, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others: the importance of attracting and retaining personnel; variability
of operating results; potential inability to maintain business relationships;
significant investment of resources in marketing; competition in the healthcare
consulting and information technology industry; management of the combined
company's growth; consolidation and cost pressures in the healthcare and life
sciences industries; regulatory and technological change in the healthcare and
information technology industries; expansion into international consulting;
integration of acquired businesses and personnel; dependence on key employees;
limited protection of proprietary information; control by existing stockholders
and management and other factors referenced in FCG's Prospectus, dated February
13, 1998, and each company's 10Q for the quarter ended June 30, 1998.
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