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): April 17, 2000
MGC Communications Inc.
(Exact name of Registrant as specified in its charter)
Nevada 0-24059 88-0360042
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
171 Sully's Trail, Suite 202, Pittsford, NY 14534
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 218-6550
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2
Item 5. Other Events.
On April 17, 2000, Mpower Communications Corp. (a/k/a MGC
Communications, Inc.), a Nevada corporation ("Mpower"), Mpower Merger Sub, Inc.,
a Delaware corporation and wholly-owned subsidiary of Mpower ("Merger Sub"), and
Primary Network Holdings, Inc., a Delaware corporation ("Primary Network"),
entered into an Agreement and Plan of Merger (the "Merger Agreement"). Upon the
satisfaction of the conditions set forth in the Merger Agreement, Merger Sub
will merge with and into Primary Network (the "Merger") and upon consummation of
the Merger, Primary Network will be the surviving corporation.
As of the effective time of the Merger, each issued and
outstanding share of common stock, par value $0.001 per share, of Primary
Network will be converted into the right to receive 0.02022 shares of common
stock, par value $0.001 per share, of Mpower. A copy of the press release issued
by Mpower on April 17, 2000 is attached hereto as Exhibit 99.1 and is hereby
incorporated by reference in its entirety.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
None.
(b) Pro forma financial information.
None.
(c) Exhibits.
99.1. Press Release issued by Mpower on April 17, 2000.
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EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press Release issued by Mpower on April 17, 2000
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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.
MCG COMMUNICATIONS, INC
Date: April 17, 2000 /s/ Kent F. Heyman
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Name: Kent F. Heyman
Title: Vice President and General Counsel
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Mpower Communications to Acquire Primary Network
Provides speed-to-market with strategic collocation facilities and direct sales
force
ROCHESTER, NY - April 17, 2000 - Mpower Communications Corp. (Nasdaq:MPWR), a
facilities-based provider of broadband data, Internet and telephony services to
business customers, today announced a definitive agreement to acquire Primary
Network Holdings, one of the largest data-centric communication providers in the
Midwest, for $145 million.
Based in St. Louis, Primary Network currently offers integrated data, Internet
and voice services primarily to business customers in St. Louis, Kansas City and
Springfield, Missouri, and Kansas City, Kansas. Primary Network has 46 revenue
ready collocation facilities today with plans to expand to 116 collocations by
year-end, which complements Mpower's national expansion strategy.
"This acquisition hits on all cylinders - it provides speed-to-market, DSL
equipped collocations, a direct sales force, an outstanding management team and
a solid base of business customers," said Mpower Communications President and
Chief Executive Officer Rolla P. Huff. "It is value-added and accretive on all
measures and accelerates our entry into key Midwest markets by more than six
months."
Through the acquisition, Mpower will gain a 60-person strong direct sales force,
a broad portfolio of data services and critical bench strength for its Regional
teams. All of Primary Network's operational leaders will join Mpower including
Rich Phillips, Primary Network's Chief Operating Officer; Tom Hesterman,
currently President of Operation Support and Services; and John Alden the
company's Senior Vice President of Sales and Marketing.
"We are thrilled with the opportunity to join forces with an organization as
strong as Mpower. Rolla and his team have the right strategy, management and
technology to provide customers with leading edge solutions today, and the right
vision to pioneer tomorrow," said Rich Phillips, Chief Operating Officer of
Primary Network. "The combination of these two organizations will allow
customers to more quickly realize the benefits of Mpower's advanced services on
a nationwide basis."
Mpower will issue 1.4 million shares to Primary Network shareholders, will
assume approximately $76 million of net debt, a portion of which will be swapped
for additional high-yield bonds to be issued under Mpower's recent high-yield
financing indenture, and will account for this transaction as a purchase. The
agreement has been approved by the Boards of Directors of both companies and is
expected to close in the third quarter. Bear Stearns has provided a fairness
opinion to Mpower related to the acquisition.
<PAGE>
About Primary Network
Primary Network provides data-centric communications services to business and
residential customers in the Midwest. The company offers a variety of services
including Digital Subscriber Lines, dedicated access, Internet access, Web
hosting, and local and long distance service. Primary has recently started
deploying Voice-over-DSL technology to provide long distance phone service to
its customers. Primary Network was named #22 on Deloitte & Touche's annual
Technology Fast 500 List for 1999, and has been nominated for Computerworld's
Smithsonian award for technology innovation. The company's web site address is
www.primary.net.
About Mpower Communications Corp.
Mpower Communications (a/k/a MGC Communications, Inc.) is a facilities-based
broadband communications provider offering a full range of data, telephony,
Internet access and Web hosting services for small and medium-size business
customers. The company currently operates in California, Chicago, Atlanta,
Southern Florida and Las Vegas. Mpower was recently ranked 12th in the Bloomberg
Tech 100 listing of the fastest growing technology companies in the United
States based on sales growth for the 1999 fiscal year. Further information about
the company can be found at www.mpowercom.com.
Forward-Looking Statements
Certain statements contained in this press release that state Mpower
Communications and/or management's intentions, hopes, beliefs, expectations or
predictions of the future are forward-looking statements. Management wishes to
caution the reader these forward-looking statements are not historical facts and
are only estimates or predictions. Actual results may differ materially as a
result of risks and uncertainties including, but not limited to, projections of
future sales, returns on invested assets, regulatory approval processes, market
conditions and other risks detailed from time to time in Mpower's Securities and
Exchange Commission filings.
Mpower Conference Call
Mpower has scheduled a conference call for later this morning to discuss its
acquisition of Primary Network.
Date: Monday, April 17, 2000
Time: 10:00 a.m. (Eastern Time)
Participants: Rolla P. Huff, President and Chief Executive Officer
Michael R. Daley, Executive Vice President and Chief Financial
Officer
Conference Call Number: 800-348-6379
A replay of the conference call will be available from April, 17, 2000 at 12:00
p.m. through Monday, April 24, 2000 at 12:00 p.m. by dialing 800-633-8284. The
reservation number for the replay is #14983126.
For more information contact:
David S. Clark Michele D. Sadwick
SVP Investor Relations VP Corporate Communications
Mpower Communications Mpower Communications
716.218.6559 716.218.6542
[email protected] [email protected]
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