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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
February 8, 1999
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
BUILDING ONE SERVICES CORPORATION
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(EXACT NAME OF REGISTRANT SPECIFIED IN ITS CHARTER)
DELAWARE 000-23421 52-2054952
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(STATE OR JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
800 CONNECTICUT AVENUE, N.W., SUITE 1111, WASHINGTON, D.C. 20006
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(202) 261-6000
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 5. OTHER EVENTS
On February 8, 1999, the Registrant issued a press release announcing, among
other things, that it mutually terminated a previously announced transaction
with Boss Investment LLC, an affiliate of Apollo Management L.P. and intends to
commence a tender offer for approximately 23 million shares at $25 per share.
The Registrant hereby incorporates by reference into this Item 5 the press
release, attached hereto as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release, dated February 8, 1999.
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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.
CONSOLIDATION CAPITAL CORPORATION
Dated: February 8, 1999 By: /s/ F. Traynor Beck
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F. Traynor Beck
Executive Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit
99.1 Press Release
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EXHIBIT 99.1
[BUILDING ONE LOGO APPEARS HERE] PRESS RELEASE
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For immediate release - February 8, 1999 Release No. 99-002
BUILDING ONE SERVICES CORPORATION
(NASDAQ - "BOSS") Company
Contact: Timothy Clayton
Building One Services
Corporation
(202) 261-6000
[email protected]
BUILDING ONE SERVICES ANNOUNCES TENDER OFFER PLAN
. Mutually Terminates Transaction with Apollo Management, L. P. Affiliate over
Proposed Transaction Amendments
. Announces Board Approval to Commence Tender Offer for 50% of Outstanding
Shares and Stock Options at $25 Per Share
. Announces Preliminary 4th Quarter Results of $0.38 Per Diluted Share, Topping
Analyst Consensus Estimates
. Announces 25% Increase in Year over Year Same Unit Backlog of $693.5 million
vs. $553.4 million
Washington, D.C. (February 8, 1999)---Building One Services Corporation (NASDAQ:
BOSS) today announced that it has agreed to mutually terminate its merger
agreement with Boss Investment LLC, an affiliate of Apollo Management, L. P.,
entered into on December 23, 1998.
The merger agreement was conditioned on a number of items, including Boss
Investment's comfort with arrangements with management of Building One Services
regarding their stock after the recapitalization. Building One Services and
Boss Investment have been unable to agree to satisfactory terms with respect to
such arrangements and other matters and, therefore, have mutually terminated the
merger agreement.
Building One Services also announced that its Board of Directors has approved a
tender offer by the Company for approximately 23 million shares at $25 per share
plus 50% of outstanding stock options. The Company expects to receive shortly
a commitment letter from a major financial institution for $350 million in high-
yield debt financing and $350
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BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
Page 2
million in a revolving credit facility. These instruments, coupled with
approximately $215 million in cash on the Company's balance sheet, will be used
to effect the tender offer, which is expected to commence next week. The $700
million in outside financing is expected to be subject to a number of customary
conditions, including completion of due diligence and execution of a definitive
credit agreement. The tender offer is expected to be completed in April 1999.
"We are gratified that Boss Investment has agreed to release the investment
bankers and commercial bankers who had conducted simultaneous due diligence so
that we may proceed to negotiate directly with them concerning the proposed
financing for our tender offer," said Jonathan Ledecky, Chairman and Chief
Executive Officer of Building One Services.
"Our strong financial results, when coupled with improvements in the capital
markets for high yield financing since December, including the completion of two
high yield debt financings by our direct competitors, is expected to enable us
to move forward with the proposed tender offer," said Timothy Clayton, Executive
Vice President and Chief Financial Officer of Building One Services. "This
transaction provides value to our shareholders and reconfigures our balance
sheet in a manner to provide a higher return on equity. In addition, this
transaction will preserve a significant public float in Building One Services
stock," said Clayton.
Building One Services Corporation also announced preliminary diluted earnings
per share of $0.38 for the fourth quarter and $1.16 for the year ended December
31, 1998. The full year results reflect a restatement of prior quarterly
results resulting from changes in the accounting treatment for certain
acquisitions that were previously accounted for as pooling-of-interests
transactions. Detailed financial results for the fourth quarter and full year
will be released in early March following the completion of the Company's annual
audit.
"We are pleased that our fourth quarter results came in above the analyst
consensus estimate of $0.37 per share," said Timothy Clayton. "We are also
pleased that our 1998 year-end backlog expanded 25% to $693.5 million from year
ago levels of $553.4 million on a same unit basis," said Clayton.
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BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
Page 3
Under the proposed tender offer, the Company is expected to utilize
approximately $575 million to repurchase approximately 23 million shares out of
approximately 46 million shares projected to be outstanding at the time of the
tender offer. In addition, the Company expects to spend approximately $15
million to repurchase 50% of outstanding stock options. It is estimated that
the Company will have approximately $20 million in financing, legal, accounting,
and other one-time charges associated with the tender offer.
"Given our historical run-rate of approximately $130 million in earnings before
interest, taxes, depreciation and amortization (EBITDA), our total debt to
EBITDA ratio would be approximately 3.0x and our EBITDA to debt service ratio
would be approximately 3.25x following the proposed tender offer financing.
These ratios should enable us to secure a significant credit facility to allow
us to continue our acquisition program, satisfy our projected earnout payment
requirements and provide for appropriate capital expenditures for the coming
fiscal year," said Clayton.
Building One Services Corporation is a leader in the facilities services
industry and has a corporate goal of becoming a national single-source provider
of facilities services. Facility services companies provide many products and
services needed for the routine operation and maintenance of a building.
Building One Services currently has annualized revenues of approximately $1.2
billion and has acquired companies in the electrical, mechanical and janitorial
segments of the facilities services industry.
This press release contains forward-looking statements. Such statements relate
to, among others things, the transactions contemplated by the tender offer; the
ability to secure the financing for the tender offer; the level of indebtedness
to be incurred by the Company; the ability to finance acquisitions; the future
earnings of the Company; and the Company's acquisition program. Any or all of
our forward-looking statements in this press release or in any other public
statements we make may turn out to be wrong. They can be affected by inaccurate
assumptions we might make or by known or unknown risks and uncertainties,
including, without limitation, the following: the risks associated with
significant indebtedness, the dependence on key personnel of the Company and
hourly wage and technical employees; risks related to the Company's
consolidation strategy, its ability to complete acquisitions and the continuing
consolidation in the industry; the ability to integrate acquisitions; risks
related to acquisition financing, including potential dilution; possible
significant amortization charges; exposure to downturns in commercial and
industrial construction; substantial competition; and other factors affecting
the Company's prospects described in the Company's most recent Registration
Statement on Form S-4 filed with the Securities and Exchange Commission on
August 3, 1998 and its other public filings.
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BUILDING ONE SERVICES CORPORATION
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Press Release 99-002
Page 4
Building One Services Corporation will hold a conference call on Monday,
February 8, 1999 at 9:30 a.m. Eastern time. To participate in the call from the
United States, dial in on 1-800-650-8824. For all callers outside of the United
States, dial in on 703-736-7228. All callers should ask to be included in the
"Building One Services Corporation Conference Call."
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