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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
December 1, 1999
ENSTAR INC.
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(Exact name of registrant as specified in its charter)
Minnesota 41-1831611
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7450 Flying Cloud Drive, Eden Prairie, MN 55344
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(Address of prinicpal executive office)
Registrant's telephone number, including area code: (612) 941-3200
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Item 1. Change in Control of Registrant
On December 1, 1999 (the "Effective Date"), ENStar Inc., a Minnesota
corporation (the "Company"), consummated a merger (the "Merger") with ENStar
Acquisition, Inc., pursuant to an Agreement and Plan of Merger (the "Merger
Agreement"), dated August 13, 1999, among the Company, ENStar Acquisition,
Inc., a Minnesota corporation wholly owned by two limited partnerships and a
trust controlled by James H. and Jeffrey J. Michael (the "Acquisition Co."),
James H. and Jeffrey J. Michael and the two limited partnerships and the
trust controlled by them (together, the "Michael Family"). The Merger was
approved by the Company's shareholders at a meeting held on December 1, 1999.
The Merger became effective on December 1, 1999 after the filing of the
Articles of Merger with the Secretary of State of the State of Minnesota. As
a result of the Merger, the Acquisition Co. was merged with and into the
Company, with the Company as the surviving corporation (the "Surviving
Corporation"), and each share of common stock of the Company outstanding
immediately prior to the Merger and not owned or controlled by the Michael
Family was converted into the right to receive $12.50 in cash. In addition,
holders, other than members of the Michael Family, of options to acquire
shares of common stock of the Company became entitled to receive a cash
settlement, net of withholding taxes, equal to the excess of $12.50 over the
exercise price of such options (together with the cash payment for common
stock of the Company, the "Merger Consideration").
Following the Merger, the Michael Family owns 100% of the Company and
will have complete control over the management and conduct of the Company's
business, all income generated by the Company and any future increase in the
Company's value. Similarly, the Michael Family will also bear the risk of any
losses incurred in the operation of the Company and any decrease in the value
of the Company.
The amount of funds required to (1) fund the payment of the Merger
Consideration; and (2) pay the fees and expenses in connection with the
Merger is estimated to be approximately $15 million. Approximately $13.1
million of these funds are financed by a revolving credit facility and term
loan agreement and the remainder of the funds are financed by the Company's
existing cash balances.
The Revolving Credit and Term Loan Agreement dated as of November 29,
1999, ("Revolving Credit and Term Loan Agreement") among 3J2R Limited
Partnership, 4J2R1C Limited Partnership, Jeffrey J. Michael, as Trustee of
the Michael Acquisition Corporation Trust and National City Bank of
Minneapolis details the terms under which National City Bank agrees to
provide the Michael Family a revolving loan of up to $8.0 million and a term
loan of $6.0 million, the proceeds of which will then be loaned by the
Michael Family to the Acquisition Co. The revolving loan has a term of three
years, bearing interest at a variable rate equal to 1.5% in excess of the
London inter-bank offered rate (LIBOR), and calls for monthly payments of
interest only with a single principal payment at maturity. The term loan to
the Michael Family has a term of five years, bearing interest at a variable
rate equal to 1.75% in excess of LIBOR, and calls for monthly payments of
interest with five equal annual installments of principal payments. Both
loans are secured by a pledge of investment grade marketable securities.
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The Agreement among ENStar Acquisition, Inc., Jeffrey J. Michael, James
H. Michael, 4J2R1C Limited Partnership, 3J2R Limited Partnership and Jeffrey
J. Michael, as trustee of the Michael Acquisition Corporation Trust ("Loan
Agreement") details the terms upon which the Michael Family will loan the
Acquisition Co. the necessary capital to finance the Merger. This Loan
Agreement carries substantially the same terms as the Revolving Credit and
Term Loan Agreement except that the variable interest rates on the revolving
loan and the term loan will be 1.75% and 2.0% in excess of LIBOR,
respectively, and the loans will be secured by the Acquisition Co. granting a
security interest in all its assets in favor of the Michael Family.
Acquisition Co.'s obligations under the Loan Agreement became an obligation
of the Surviving Corporation upon consummation of the Merger.
As of the Effective Date, the officers of the Company became the
officers of the Surviving Corporation and Jeffrey J. Michael, the sole
director of the Acquisition Co. became the initial director of the Surviving
Corporation. James H. Michael also became a director of the Surviving
Corporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release of ENStar Inc. dated December 1, 1999,
announcing completion of going-private transaction.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 6, 1999 ENSTAR INC.
(Registrant)
By /s/ Peter E. Flynn
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Peter E. Flynn
Executive Vice President
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EXHIBIT INDEX
EXHIBIT DESCRIPTION OF DOCUMENT
99.1 Press Release of ENStar Inc. dated December 1, 1999 announcing
completion of going-private transaction.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Date: December 1, 1999
Contact: Peter E. Flynn
Executive Vice President
(612) 942-3887
ENSTAR INC. ANNOUNCES COMPLETION OF
GOING-PRIVATE TRANSACTION
MINNEAPOLIS, Minn., December 1, 1999, ENStar Inc. (Nasdaq: ENSR) announced
it completed its going-private transaction today. The transaction, which
was approved by ENStar's shareholders this morning, was accomplished
through a merger of ENStar Acquistion, Inc., a corporation formed by James
Michael and Jeffrey Michael and certain related entities, with and into
ENStar, with ENStar as the surviving corporation. James Michael is a member
of the Board of Directors of the Company and Jeffrey Michael is the President
and Chief Executive Officer of the Company and a member of the Board of
Directors. As a result of the merger, ENStar's shareholders are entitled to
receive cash equal to $12.50 per share of ENStar common stock.
ENStar's transfer agent, Norwest Bank Minnesota, N.A., will act as the paying
agent pursuant to the Agreement and Plan of Merger dated August 13, 1999.
Norwest will mail to shareholders of record documents to accompany ENStar
stock certificates, which must be submitted to Norwest in order for
shareholders to receive payment for their shares. Upon proper completion of
these documents and receipt of stock certificates, Norwest will pay the
merger consideration to each shareholder of record at the effective time
of the merger.
ENStar is a holding company. Its principal operating companies include
Americable, Inc. and Enstar Networking Corporation. Americable is a
provider of networking and connectivity products, cable assemblies and
custom OEM manufacturing solutions. Enstar Networking is a network
integrator providing services that build, maintain and secure network
infrastructures. ENStar also owns 2,050,000 shares (25%) of the common
stock of CorVel Corporation (Nasdaq: CRVL). CorVel is an independent,
nationwide provider of managed care services to employers and insurers.
