UNITED STATES
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):
May 19, 1998
AmeriComm Direct Marketing, Inc.
Delaware 333-08925 23-2574778
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
5775 Peachtree Dunwoody Rd.
Suite C-150
Atlanta, Georgia
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(404) 256-1123
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Item 5. Other Events.
On May 19, 1998, AmeriComm Direct Marketing, Inc. issued a press
release announcing that AmeriComm Holdings, Inc., its parent, executed
a merger agreement with DMAC Holdings, Inc. and DMAC Merger Corp.
whereby DMAC Holdings, Inc. will acquire all of the outstanding stock
of AmeriComm Holdings, Inc. A copy of the press release is attached as
Exhibit 99.1 and is incorporated herein by reference. The foregoing
description is qualified in its entirety by reference to such exhibit.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) None.
(b) None.
(c) Exhibits.
99.1 Text of press release issued by AmeriComm Direct
Marketing, Inc. on May 19, 1998.
<PAGE>
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.
AMERICOMM DIRECT MARKETING, INCORPORATED
Date: May 19, 1998 By: /s/ Robert B. Webster
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Name: Robert B. Webster
Title: Executive Vice President
and Chief Financial Officer
EXHIBIT INDEX
Exhibit 99.1 Text of press release issued by AmeriComm Direct Marketing,
Inc. on May 19, 1998.
EXHIBIT 99.1
AmeriComm Direct Marketing, Inc., the Atlanta based sole operating Company
of AmeriComm Holdings, Inc., the Company's parent corporation (the "Holding
Company"), today announced record first quarter Net Sales and EBITDA. First
quarter 1998 Net Sales were $46.4 million, an increase of 19% over $38.9 million
in the same quarter of 1997. Operating Income was $1.6 million for the quarter
ended March 31, 1998, as compared to $1.4 million for the comparable 1997
period, an increase of 12%. EBITDA for the quarter was $4.9 million, an increase
of 20% over $4.1 million in the same quarter of 1997. The increases in Net
Sales, Operating Income and EBITDA were due primarily to the acquisitions of
Label America, Inc., in February, 1997, AmeriComm Direct Marketing, Inc., in
April 1997, Cardinal Marketing, Inc. and Cardinal Marketing of New Jersey, Inc.
in March 1998.
After giving pro forma effect to the acquisitions of Label America, Inc.,
AmeriComm Direct Marketing, Inc., Cardinal Marketing, Inc. and Cardinal
Marketing of New Jersey, Inc., Net Sales for the LTM (last twelve months) March
31, 1998, were $206.2 million, an increase of 2.3% over pro forma Net Sales of
$201.5 million as reported for LTM December 31, 1997.
Pro forma EBITDA for the LTM March 31, 1998, was $27.6 million, a 2.2%
increase over pro forma EBITDA of $27.0 million as reported for LTM December 31,
1997. Pro forma EBITDA, as a percentage of net sales, for LTM March 31, 1998 and
December 31, 1997 was 13.4%.
Interest expense for the pro forma LTM March 31,1998 was $14.1 million.
Interest Coverage was 2.0 for the pro forma LTM March 31, 1998 and December 31,
1997. At March 31, 1998, there was $12.4 million outstanding on the $25.0
million line-of-credit and available cash on the balance sheet was $1.4 million.
Pro forma Debt/EBITDA leverage was 4.3 times for LTM March 31, 1998 and
December 31, 1997.
Capital expenditures were $2.3 million for the three month period ended
March 31, 1998.
As noted above, on March 16, 1998, AmeriComm Direct Marketing, Inc.
acquired Cardinal Marketing, Inc. and Cardinal Marketing of New Jersey, Inc.
(collectively referred to as Cardinal). Cardinal, founded in 1972, provides
full-service direct marketing services catering to the financial services and
retail markets, with proprietary competencies in customer profiling and response
analysis.
Subsequent to the quarter and on May 18, 1998, the Holding Company executed
a Merger Agreement with DMAC Holdings, Inc. ("DMAC") whereby DMAC will acquire
all of the outstanding stock of the Holding Company. DMAC is owned substantially
by McCown De Leeuw & Co. IV, L.P. ("MDC IV"), an affiliated fund of the Holding
Company's majority owner, McCown De Leeuw & Co. II, L.P. This investment
demonstrates McCown De Leeuw's continuing commitment to the Company. Since MDC
IV is a "Permitted Holder" under the terms of the Indenture dated as of June 15,
1996 relating to the Company's 11-5/8% Senior Notes due 2002, the Merger will
not constitute a "Change of Control" transaction as defined in the Indenture.
Pursuant to the Merger Agreement, each share of stock of the Holding
Company (the "Common Stock") issued and outstanding immediately prior to the
effective time of the Merger (the "Effective Time") will be converted into the
right to receive, in cash, a per share amount equal to (A) $200 million less (1)
all outstanding indebtedness of the Holding Company at the Effective Time and
(2) fees and expenses of the Holding Company in connection with this
transaction, (B) divided by the number of issued and outstanding shares of stock
immediately prior to the Effective Time. In addition, shareholders of the
Holding Company will also receive an amount equal to the amount by which the
working capital, as defined, of the Holding Company and the Company at Closing
exceeds $25.3 million.
The Company was also informed that DMAC has separately executed an
agreement to acquire all of the outstanding capital stock of DIMAC Marketing
Corporation. Both acquisitions are subject to customary closing conditions,
including Hart-Scott-Rodino clearance.
