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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
December 18, 1998
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Date of Report (Date of earliest event reported)
FIRST CONSULTING GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 000-23651 95-3539020
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation File Number) Identification No.)
111 W. OCEAN BLVD., 4TH FLOOR
LONG BEACH, CA 90802
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(Address of principal executive offices)
(562) 624-5200
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THIS CURRENT REPORT
ON FORM 8-K (THE "REPORT") CONTAINS FORWARD-LOOKING STATEMENTS THAT KNOWN
AND UNKNOWN INVOLVE RISKS AND UNCERTAINTIES. IN PARTICULAR, SEE THE SECTION
ENTITLED "RISK FACTORS" IN THE JOINT PROXY STATEMENT/PROSPECTUS FILED AS
PART OF THE REGISTRATION STATEMENT ON FORM S-4 (NO. 333-65127) DECLARED
EFFECTIVE BY THE SEC ON NOVEMBER 17, 1998.
Foxtrot Acquisition Sub, Inc., a Delaware corporation ("Merger Sub"), which
was a wholly owned subsidiary of First Consulting Group, Inc., a Delaware
corporation ("FCG"), was merged with and into Integrated Systems Consulting
Group, Inc., a Pennsylvania corporation ("ISCG"), pursuant to an Agreement
and Plan of Merger and Reorganization, dated as of September 9, 1998, among
FCG, Merger Sub, and ISCG (the "Agreement"). The terms of the Agreement were
determined through arms' length negotiations between FCG and ISCG.
The merger of Merger Sub with and into ISCG (the "Merger") became effective
at the time of the filing of a Certificate of Merger with the Delaware
Secretary of State on December 18, 1998 and the filing of the Articles of
Merger with the Pennsylvania Secretary of State on December 18, 1998 (the
"Effective Time"). Approximately 77% of the outstanding shares of ISCG
common stock, par value $ .005 per share ("ISCG Common Stock"), approved the
Agreement and the Merger and approximately 81% of the outstanding shares of
FCG common stock, par value $.001 per share ("FCG Common Stock"), approved
the issuance of FCG Common Stock in connection with the Merger.
Of the ISCG Common Stock eligible to vote on the issuance of FCG Common Stock
in connection with the Merger, approximately 4% voted against the Agreement
and the Merger and approximately 1% abstained. Of the Common Stock eligible
to vote on the issuance of FCG Common Stock in connection with the Merger,
approximately 0.04% voted against the issuance and approximately 0.07%
abstained.
At the Effective Time: (i) Merger Sub ceased to exist; (ii) ISCG, as the
surviving corporation in the Merger, became a wholly owned subsidiary of FCG;
and (iii) subject tot the provisions of the Agreement relating to the payment
of cash in lieu of fractional shares, each share of ISCG Common Stock
outstanding immediately prior to the Effective Time was converted into the
right to receive .77 shares of FCG Common Stock.
In addition, pursuant to the Agreement, at the Effective Time, all rights
with respect to ISCG options and warrants then outstanding, were converted
into and became rights with respect to FCG Common Stock, and FCG assumed each
such outstanding ISCG option and warrant in accordance with the terms of such
option. By virtue of the assumption by FCG of such ISCG options, from and
after the Effective Time: (i) each ISCG option assumed by FCG may be
exercised solely for FCG Common Stock; (ii) the number of shares of FCG
Common Stock subject to each such ISCG option is equal to the number of
shares of ISCG Common Stock subject to such option immediately prior to the
Effective Time multiplied by .77 (the exchange ratio in the Merger), rounded
down to the nearest whole share (with cash, less the applicable exercise
price, being payable for any fraction of a share); and (iii) the per share
exercise price under each such ISCG option was adjusted by dividing the per
share exercise price under such ISCG option by .77 and rounding up the
nearest cent.
The former stockholders of ISCG are receiving approximately 6,246,306 shares
of FCG Common Stock pursuant to the Merger. In addition, shares of ISCG
options and warrants were converted into and become rights with respect to
approximately 1,176,049 shares of FCG Common Stock. With respect to the ISCG
options, FCG assumed each such option in accordance with the terms of the
stock option plan under which it was issued and the stock option agreement by
which is it evidenced.
ITEM 5. FIRST CONSULTING GROUP, INC. CLOSES MERGER WITH INTEGRATED SYSTEMS
CONSULTING GROUP, INC.
On December 18, 1998 FCG closed its merger with ISCG. A press release
relating to closing of the merger is attached hereto as Exhibit 99.1.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of the Business Acquired
(1) The required financial statements with respect to the acquired
business referred to in Item 2 of this Report are incorporated by reference
to such financial statements as filed with the Securities and Exchange
Commission (the "Commission") by Integrated Systems Consulting Group, Inc.
("ISCG") (Commission File Number 000-28206) in ISCG's Annual Report on Form
10-K for the fiscal year ended December 31, 1997 and in ISCG's Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 1998, June 30,
1998, September 30, 1998.
(b) Pro Forma Financial Information
(2) The required pro forma financial information with respect to the
acquired business referred to in Item 2 of this report is incorporated by
reference to such pro forma financial information as filed with the
Commission by ISCG in the Registration Statement on Form S-4 (Registration
No. 333-65127) on November 17, 1998.
(c) Exhibits
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger and Reorganization, dated as of
September 9, 1998, among First Consulting Group, Inc., a
Delaware Corporation, Foxtrot Acquisition Sub, Inc., a
Delaware Corporation, and Integrated Systems Consulting Group,
Inc., a Pennsylvania Corporation, (incorporated reference to
Exhibit 99.1 to Current Report on Form 8-K filed with the
Commission on September 23, 1998).
23.1 Consent of Grant Thornton L.L.P. (filed herewith)
99.1 Press Release dated December 18, 1998 (filed herewith)
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SIGNATURE
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.
FIRST CONSULTING GROUP, INC.
Date: December 18, 1998
By: /s/ Luther J. Nussbaum
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Luther J. Nussbaum
Chief Executive Officer
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EXHIBIT 23.1
We consent to the incorporation by reference in this current report on Form
8-K our report dated January 17, 1998, except for Note K as to which the date
is February 10, 1998, appearing in the Registration Statement on Form S-4
(File No. 333-65127) of First Consulting Group, Inc. filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933
which became effective November 17, 1998.
Grant Thornton LLP
Irvine, California
December 18, 1998
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EXHIBIT 99.1
For more information contact:
Luther Nussbaum, Chief Executive Officer
(562) 624-5220
Tom Reep, Chief Financial Officer
(562) 624-5250
FIRST CONSULTING GROUP COMPLETES MERGER WITH
INTEGRATED SYSTEMS CONSULTING GROUP
FCG ENHANCES BREADTH OF COVERAGE IN THE CONVERGING HEALTHCARE SERVICES AND
PHARMACEUTICAL INDUSTRIES
LONG BEACH, Calif. (December 18, 1998) - First Consulting Group, Inc.
(NASDAQ:FCGI), a leading provider of operations improvement and information
management services for the healthcare, pharmaceutical and life sciences
industries, said today that it has completed its merger with Integrated
Systems Consulting Group, Inc.
The merger significantly enhances FCG's breadth of coverage in the
increasingly interrelated healthcare services, pharmaceutical and life
sciences industries. It also expands the company's client base and provides
for stronger network integration and application development capabilities in
a wide range of technologies.
As part of the merger agreement, ISCG common stockholders receive 0.77
shares of FCGI common stock for each ISCG share held.
James A. Reep and Luther J. Nussbaum continue as chairman of the board
and chief executive officer respectively. David S. Lipson, formerly chairman
and chief executive officer of ISCG, becomes vice chairman and managing
director of the pharmaceutical and life sciences practice.
-more-
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First Consulting Group
Merger Completion
Page Two
Shareholders representing approximately 77 percent and 81 percent of the
common stock outstanding of ISCG and FCG, respectively, voted in favor of the
merger. FCG was advised by Hambrecht & Quist LLC and ISCG was advised by
Robert W. Baird & Co.
Following completion of the merger, First Consulting Group now provides
consulting, customer development, systems integration and management services
to the healthcare services, pharmaceutical and life sciences industries
through 27 offices serving North America and Europe. The firm's services are
designed to increase its clients' operational effectiveness, resulting in
reduced costs, improved customer service, enhanced quality of patient care
and the more rapid introduction of new pharmaceutical compounds.
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Except for the historical information contained herein, this news
release contains forward-looking statements, including, without limitation,
statements containing the words, "believes," "anticipates," "expects" and
words of similar import. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of FCG or ISCG, or industry results, to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors
include, among others: the importance of attracting and retaining personnel;
variability of operating results; potential inability to maintain business
relationships; significant
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investment of resources in marketing; competition in the healthcare
consulting and information technology industry; management of the combined
company's growth; consolidation and cost pressures in the healthcare and life
sciences industries; regulatory and technological change in the healthcare
and information technology industries; expansion into international
consulting; integration of acquired businesses and personnel; dependence on
key employees; limited protection of proprietary information; control by
existing stockholders and management and other factors referenced in FCG's
Prospectus, dated February 13, 1998, and each company's 10Q for the quarter
ended September 30, 1998.
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