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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 18, 1998
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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 November 18, 1998
(Date of earliest event reported: November 17, 1998)
VERIO INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-24219 84-1339720
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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8005 South Chester Street, Suite 200, Englewood, Colorado 80112
(Address of Principal Executive Offices) (Zip Code)
(303) 645-1900
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On July 28, 1998, the Registrant, a wholly-owned subsidiary of the
Registrant, and Best Internet Communications, Inc., a California corporation
("Best") d/b/a Hiway Technologies ("Hiway"), entered into an Agreement and Plan
of Merger, pursuant to which the Registrant agreed to acquire Hiway. Hiway, a
leading Web hosting company headquartered in Boca Raton, Florida, recently
acquired Best, located in Mountain View, California, one of the largest business
Internet providers in the Northern California area. Under the terms of the
original merger agreement, the Registrant would have paid aggregate cash
consideration of $101.0 million and issued 8.67 million fully diluted shares of
the Registrant's common stock ("Common Stock") to Hiway's shareholders, option
holders and warrant holders on a fixed exchange ratio basis that implied a total
transaction value of approximately $330 million at that time. On November 17,
1998, the Registrant announced the execution of an amended and restated merger
agreement (as so amended and restated, the "Merger Agreement"). Under the
revised terms of the Merger Agreement, the cash portion of the consideration was
increased to $176.0 million and the stock portion of the consideration was
decreased to 4.92 million fully diluted shares of Common Stock. As a result,
Hiway shareholders will receive approximately $4.90 in cash and .0875 shares of
Common Stock in exchange for each outstanding share of Hiway stock (subject to
adjustment to the extent that Hiway's fully diluted capitalization changes prior
to closing). Each Hiway warrant and option which remains unexercised at the time
of closing will be assumed by the Registrant and become a warrant or option to
acquire approximately 0.3940 shares of Common Stock. Upon consummation of the
Hiway acquisition, Hiway shareholders will own approximately 11.13% of the pro
forma combined company on a fully diluted basis. The Board of Directors of the
Registrant concluded that the terms of the revised Merger Agreement are more
favorable to the Registrant and its stockholders than those of the original
transaction. Hiway will be entitled to designate one member to serve on the
Registrant's Board of Directors. The Registrant currently anticipates that the
Hiway acquisition will be completed by the first week of 1999, subject to
satisfaction of various closing conditions, which include Hiway shareholder
approval. Shareholders of Hiway holding more than 50% of its outstanding shares
have granted irrevocable proxies voting in favor of the Hiway acquisition.
Approximately 60% of the shares of Common Stock issued in the Hiway acquisition
will be subject to a six-month lock up.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
99(a) Press release issued by the Registrant dated November 17, 1998.
1
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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.
VERIO INC.
By: /s/ Carla Hamre Donelson
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Carla Hamre Donelson
Vice President, General
Counsel and Secretary
Dated: November 18, 1998
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Exhibit Index
Exhibit No. Description
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99(a) Press Release issued by the Registrant
dated November 17, 1998.
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VERIO INC. REDUCES DILUTION IN HIWAY DEAL
ENGLEWOOD, CO (NOVEMBER 17, 1998) - Verio Inc. (NASDAQ:VRIO), a leading provider
of comprehensive business Internet services, TODAY ANNOUNCED AN AGREEMENT WITH
HIWAY TECHNOLOGIES, INC. ("HIWAY") TO REALLOCATE the stock and cash portions of
the consideration to be paid in their previously announced merger, resulting in
significantly reduced dilution to Verio's shareholders.
Under the revised agreement Verio will issue 4.92 million fully diluted shares
and $176.0 million in cash for the purchase of Hiway. The previous agreement,
announced on July 28, 1998, called for 8.67 million shares and $101 million in
cash, resulting in an aggregate implied transaction value of approximately $330
million at that time. Approximately 60 percent of the shares being issued will
be subject to a six-month lockup. The new agreement has been approved
unanimously by both companies' Boards of Directors and a majority of Hiway's
shareholders. A target closing date has been set for January 1, 1999.
Justin L. Jaschke, Verio's Chief Executive Officer noted the following benefits
of the revised agreement: "The improved mix of cash and stock will reduce the
dilution to Verio's existing shareholders at a very attractive price, while
providing additional liquidity to Hiway's shareholders. It also will reduce the
amount of unrestricted stock to be issued in the transaction. We are more
enthusiastic than ever about the powerful combination of Verio and Hiway, and
have already identified several significant new opportunities that we intend to
pursue together. Plans for the integration of the two companies are well
underway as we intend to move aggressively to capitalize on our leadership
position in the enhanced services arena."
This acquisition, together with Verio's other Web hosting operations, will
result in Verio becoming the world's largest domain name-based Web hosting
company. Together with its position as one of the nation's leading providers of
connectivity and enhanced services to businesses, Verio offers its customers a
full suite of solutions for their Internet-related needs.
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ABOUT VERIO INC.
Verio Inc. (NASDAQ:VRIO) is a leading provider of comprehensive business
Internet services -INCLUDING BROADBAND CONNECTIVITY, VIRTUAL PRIVATE NETWORKS,
WEB HOSTING SOLUTIONS AND E-COMMERCE - with an emphasis on serving the small and
mid-sized business market. Since its inception in March 1996, Verio has rapidly
established a global presence through the acquisition, integration and growth of
independent Internet providers with a business customer focus. VERIO'S
OPERATIONS ARE SUPPORTED BY HIGHLY RELIABLE AND SCALABLE NATIONAL INFRASTRUCTURE
AND SYSTEMS INCLUDING A FACILITIES BASED TIER ONE NATIONAL NETWORK. Verio
delivers locally-based sales and engineering support in 39 of the top 50 U.S.
markets under the Verio brand name and provides Web hosting services to
customers in more than 100 countries.
For more information on Verio, visit the company's Web site at www.verio.com.
The corporate headquarters are located in Englewood, Colorado at 8005 S. Chester
St., Suite 200, 80112, phone number 303.645.1900.
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Except for the historical information contained herein, certain matters set
forth in this press release are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties,
including but not limited to fluctuations in operating results, additional
capital requirements, competition, integration of acquisitions and
implementation of network infrastructure. Readers are also encouraged to refer
to Verio's reports from time to time filed with the Securities and Exchange
Commission, including the Company's Current Report on Form 8-K filed on July 7,
1998, and the Company's Current Report on Form 8-K filed on October 28, 1998,
for a further discussion of Verio's business and risk factors that may affect
operating and financial results and the financial information provided herein
with respect to recent acquisitions.
