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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
OCTOBER 2, 2000
ADVANCE PARADIGM, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-21447 75-2493381
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
5215 N. O'CONNOR
SUITE 1600
IRVING, TEXAS 75039
(Address and Zip Code of Principal Executive Offices)
(469) 420-6000
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 2, 2000, pursuant to a Stock Purchase Agreement dated as of
July 11, 2000 between Advance Paradigm, Inc., a Delaware corporation (the
"COMPANY"), and Rite Aid Corporation, a Delaware corporation ("RITE AID"), the
Company acquired PCS Holding Corporation, a Delaware corporation and a
wholly-owned subsidiary of Rite Aid ("PCS"). PCS is a provider of pharmacy
benefit administration and management services, mail order pharmacy services,
computer-based prescription drug claims processing, and data management and
disease-management services to health plan sponsors. The Company paid to Rite
Aid as consideration for PCS an aggregate purchase price of (i) $675 million in
cash, (ii) 125,000 shares of Series A-2 11% Preferred Stock, (iii) $200 million
in senior subordinated notes and (iv) warrants to purchase 780,000 shares of the
Company's common stock. The Series A-2 11% Preferred Stock is convertible upon
receipt of stockholder approval into 6,250,000 shares of common stock. The
consideration paid by the Company for the outstanding stock of PCS was
determined pursuant to arms' length negotiations and took into account various
factors concerning the valuation of the business of PCS.
The cash portion of the purchase price was financed with (i) senior
secured debt provided by Merrill Lynch Capital Corporation, Bank of America,
N.A., as collateral agent and administrative agent, Bank One, N.A., as
documentation agent, and a syndicate of banks and (ii) equity financing of $150
million provided by Joseph Littlejohn & Levy Fund III, L.P. and certain other
investors (the "JLL INVESTORS") pursuant to a Securities Purchase Agreement
dated as of July 11, 2000 and an Exchange Agreement dated October 2, 2000
whereby the Company issued to the JLL Investors 4,207,000 shares of common
stock, 65,854 shares of Series A-1 11% Preferred Stock and six shares of Series
B Preferred Stock. The Series B Preferred Stock is convertible into 300 shares
of common stock and the Series A-1 11% Preferred Stock is convertible upon
receipt of stockholder approval into 3,292,700 shares of common stock. The
Company is a leading independent provider of health improvement services
offering health plans and an array of pharmacy benefit and health benefit
management services designed to build better health.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of PCS
The Financial Information required to be filed pursuant to
Item 7(a) of Form 8-K was not available at the time of filing
this Current Report on Form 8-K and will be filed on a Form
8-K/A as soon as practicable, but in no event later than 60
days after the date this Form 8-K is required to be filed.
(b) Pro Forma Financial Information
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The Pro Forma Financial Information required to be filed
pursuant to item 7(b) of Form 8-K was not available at the
time of filing this Current Report on Form 8-K and will be
filed on a Form 8-K/A as soon as practicable, but in no event
later than 60 days after the date this Form 8-K is required to
be filed.
(c) Exhibits
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
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2.1 Stock Purchase Agreement dated as of July 11, 2000 by
and between Advance Paradigm, Inc. and Rite Aid
Corporation (filed as Exhibit 2.1 to the Company's
Form 8-K filed with the Securities and Exchange
Commission on July 31, 2000 and incorporated herein
by reference).
2.2 Securities Purchase Agreement dated as of July 11,
2000 by and between Advance Paradigm, Inc. and Joseph
Littlejohn & Levy Fund III, L.P.
2.3 Exchange Agreement dated as of October 2, 2000 by and
between Advance Paradigm, Inc. and Joseph Littlejohn
& Levy Fund III, L.P.
3.1 Second Amended and Restated Bylaws of Advance
Paradigm, Inc.
3.2 Certificate of Designations for Series A-1 11%
Preferred Stock.
3.3 Certificate of Designations for Series A-2 11%
Preferred Stock.
3.4 Certificate of Designations for Series B Convertible
Preferred Stock.
10.1 Stockholders' Agreement dated as of October 2, 2000
by and among Advance Paradigm, Inc., Rite Aid
Corporation, Joseph Littlejohn & Levy Fund III, L.P.
and various other investors named therein.
10.2 Registration Rights Agreement dated as of October 2,
2000 by and among Advance Paradigm, Inc., various
guarantors named therein and Rite Aid Corporation.
10.3 Warrant dated as of October 2, 2000 issued to Rite
Aid Corporation.
10.4 Credit Agreement dated as of October 2, 2000 by and
among Advance Paradigm, Inc., Merrill Lynch Capital
Corporation and a syndicate of banks.
10.5 Indenture dated as of October 2, 2000 by and among
Advance Paradigm, Inc., various guarantors and U.S.
Trust Company of Texas, N.A.
99.1 Joint Press Release dated July 12, 2000 issued by
Advance Paradigm, Inc. and Rite Aid Corporation
(filed as Exhibit 99.1 to the Company's Form 8-K
filed with the Securities and Exchange Commission on
July 31, 2000 and incorporated herein by reference).
99.2 Press Release dated October 2, 2000 issued by Advance
Paradigm, Inc.
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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.
ADVANCE PARADIGM, INC.
Date: October 16, 2000 By: /s/ David D. Halbert
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Name: David D. Halbert
Title: Chairman of the Board and
Chief Executive Officer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
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2.1 Stock Purchase Agreement dated as of July 11, 2000 by
and between Advance Paradigm, Inc. and Rite Aid
Corporation (filed as Exhibit 2.1 to the Company's
Form 8-K filed with the Securities and Exchange
Commission on July 31, 2000 and incorporated herein
by reference).
2.2 Securities Purchase Agreement dated as of July 11,
2000 by and between Advance Paradigm, Inc. and Joseph
Littlejohn & Levy Fund III, L.P.
2.3 Exchange Agreement dated as of October 2, 2000 by and
between Advance Paradigm, Inc. and Joseph Littlejohn
& Levy Fund III, L.P.
3.1 Second Amended and Restated Bylaws of Advance
Paradigm, Inc.
3.2 Certificate of Designations for Series A-1 11%
Preferred Stock.
3.3 Certificate of Designations for Series A-2 11%
Preferred Stock.
3.4 Certificate of Designations for Series B Convertible
Preferred Stock.
10.1 Stockholders' Agreement dated as of October 2, 2000
by and among Advance Paradigm, Inc., Rite Aid
Corporation, Joseph Littlejohn & Levy Fund III, L.P.
and various other investors named therein.
10.2 Registration Rights Agreement dated as of October 2,
2000 by and among Advance Paradigm, Inc., various
guarantors named therein and Rite Aid Corporation.
10.3 Warrant dated as of October 2, 2000 issued to Rite
Aid Corporation.
10.4 Credit Agreement dated as of October 2, 2000 by and
among Advance Paradigm, Inc., Merrill Lynch Capital
Corporation and a syndicate of banks.
10.5 Indenture dated as of October 2, 2000 by and among
Advance Paradigm, Inc., various guarantors and U.S.
Trust Company of Texas, N.A.
99.1 Joint Press Release dated July 12, 2000 issued by
Advance Paradigm, Inc. and Rite Aid Corporation
(filed as Exhibit 99.1 to the Company's Form 8-K
filed with the Securities and Exchange Commission on
July 31, 2000 and incorporated herein by reference).
99.2 Press Release dated October 2, 2000 issued by Advance
Paradigm, Inc.
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