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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
AUGUST 11, 1998
____________________________
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
RELTEC CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 333-44277 94-3227019
____________________ ____________________ ____________________
(State or other jurisdiction of Commission File Number (I.R.S. Employer
incorporation or organization) Identification Number)
5900 Landerbrook Drive, Suite 300, Cleveland, Ohio 44124-4019
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(440) 460-3600
_________________________________________________________________
(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
See the press releases, dated August 11, 1998 and August 21, 1998, of
Reltec Corporation attached hereto as Exhibits 1 and 2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following documents are furnished as Exhibits to this Current
Report on Form 8-K pursuant to General Instruction F of Form 8-K:
1. Press release, dated August 11, 1998, of Reltec Corporation.
2. Press release, dated August 21, 1998, of Reltec Corporation.
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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.
RELTEC CORPORATION
Date: September 3, 1998
By: /s/ Valerie Gentile Sachs
-------------------------
Name: Valerie Gentile Sachs
Title: Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
DOC. NO. DOCUMENT DESCRIPTION
1. Press release, dated August 11, 1998, of Reltec Corporation.
2. Press release, dated August 21, 1998, of Reltec Corporation.
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Exhibit 99.1
[LOGO] [LOGO]
For Release
August 11, 1998
RCT-048-898
RELTEC Contacts: Scott Fine Sheri Kightlinger
Vice President, Finance Manager, Corporate Communications
RELTEC Corporation RELTEC Corporation
440-460-3728 440-460-3741
[email protected] [email protected]
PFS Contact: Andrew Knott
Vice President, Sales and Marketing
Positron Fiber Systems
609-222-1288
[email protected]
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RELTEC TO ACQUIRE POSITRON FIBER SYSTEMS IN $200 MILLION
CASH TRANSACTION
Combination Creates Powerful
Broadband Services Delivery Platform
Cleveland, OH and Montreal, Quebec, Canada -- August 11, 1998 --
RELTEC Corporation (NYSE: RLT) and Positron Fiber Systems Corporation (PFS)
(NASDAQ PFSCF MSM/TSE: PFS) today jointly announced that they have entered
into a definitive merger agreement under which RELTEC has undertaken to make
an offer to purchase all outstanding common shares of PFS for US$13.625 per
share in cash. The aggregate value of the transaction is approximately $200
million. This combination creates a powerful family of broadband access
platforms for delivering multimedia services. This merger also advances
RELTEC's position in the multi-billion dollar SONET SDH broadband access
delivery market. The acquisition is expected to be accretive to RELTEC's 1999
earnings.
"The addition of the PFS team is key to accelerating our growth in the
provisioning of access systems for telecommunications carriers worldwide, and
represents another step in realizing our goal of providing the most
comprehensive, advanced family of broadband services platforms in the
industry," said Dudley P. Sheffler, President and Chief Executive Officer of
RELTEC. "This combination is good for our customers, shareholders and our
employees. Additionally, we're very pleased with the high-caliber management
team at PFS and anticipate a seamless integration for employees as both
organizations share a similar culture -- we're entrepreneurial and have a
commitment to the same core values of customer satisfaction and quality
products and services. More important, we're both focused on the rapidly
growing market for broadband access.
1
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Headquartered in Montreal, Quebec, Canada, and employing 152 people, PFS
offers a range of carrier class SONET and SDH products for CLECs, CAPs,
RBOCs, IXCs and telecommunications OEMs worldwide. PFS' state-of-the-art
Position OSIRIS-TM- and Positron MIST-TM- family of carrier class
multiplexers and transmultiplexers meet the needs of access carriers
worldwide, while providing the most flexible and cost effective delivery
vehicle for both existing and emerging services. PFS' customers include Cox
Communication. E. Splro, MoLeodUSA, Nextlink and OEMs including Digital
Microwave Corporation and Siemens Telecom Networks.
In addition to building on PFS' established SONET and SDH product line of
market-leading, broadband access multiplexer products, a key strategic
initiative of this acquisition will be the rapid integration of PFS SONET and
Network Element Management technology into RELTEC's full service
DISC*S-registered trademark- Next Generation Digital Loop Carrier (NGDLC)
platform. This includes RELTEC's industry-leading, "fiber-to-the-curb" (FTTC)
Deep Fiber Solution-SM-, the market's most widely deployed FTTC access
system, providing integrated voice, video and high-speed data services. This
combination will allow customers to save money, increase bandwidth and offer
new revenue-enhancing services.
Donald Gibbs, PFS' President and Chief Executive Officer, said "We are
extremely pleased to join RELTEC. With their strong market position and
expertise in the access network, we now have the ability to more effectively
pursue our commitment to provide market-leading SONET transport and broadband
access solutions. Since the announcement of the OEM agreement between RELTEC
and PFS in June, we have already begun the process of integrating the
Positron OSIRIS SONET broadband access technology into the DISC*S NGDLC
system. Today's announcement will obviously accelerate these activities. This
high-performance, integrated system solution will enable us to provide highly
resilient delivery of both narrowband and broadband residential and business
services on the same platform."
Mr. Gibbs continued, "Given RELTEC's substantial sales penetration of the major
Telcos in North America, this merger provides a significant new channel for
our family of broadband multiplexers. Access to the RBOC market strengthens
and complements our overall sales strategy."
In conjunction with the acquisition, RELTEC also announced the formation of a
new business unit, the Access Network Systems Group. This new until will be
comprised of two divisions. Access Systems (NGDLC-based delivery platforms)
and Positron Fiber Systems, (SONET, SDH and Network Element Management).
Michael Pratt will lead the Access Network Systems Group as Vice President
and General Manager. This new business will leverage existing RELTEC
technology and product strengths with PFS' high-speed fiber transmission
capabilities and RELTEC's innovative access initiatives.
"DISC*S provides a wide range of access services including voice data and video
for residential and high capacity business users," said Michael Pratt, Vice
President and General Manager, RELTEC Access Network Systems Group. "As the
need for network flexibility increases, and fiber deployment accelerates in
local access networks, Positron OSIRIS SONET and SDH access capabilities
become a critical component of NGDLC solutions worldwide. RELTEC will now
provide integrated SONET/SDH solutions
2
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capable of handling the routing of aggregated ATM and IP data streams from
our xDSL Advanced Copper Solutions -SM- and market-leading FTTC Deep Fiber
Solutions. In addition, since OSIRIS SONET interfaces have demonstrated
interoperability with other SONET multiplexers, RELTEC platforms will perform
in a mixed vendor environment. We will continue to build on their highly
competent Montreal development organization to address these exciting, new
opportunities together.''
The existing management team will continue to lead PFS. Upon completion of
the acquisition, PFS will become a key component of RELTEC's Access Network
Systems Group. As previously announced by PFS, a new Montreal facility is
being prepared and employees will be moving into the new building by the end
of the year. PFS' customers, which include a number of leading competitive
local exchange carriers and competitive access providers, will benefit from
the expanded geographic presence of RELTEC's experienced, worldwide service
and support organization as well as the ability to purchase a broader range
of systems, products and services from a single source.
The merger will be consummated following receipt of normal regulatory
approvals in Canada and in the United States, and the successful completion
of a public tender offer for all of the common shares of PFS. Pursuant to the
terms of an intervention agreement with RELTEC, Positron Inc., PFS' largest
shareholder, has agreed to tender shares representing 27 percent of PFS'
current shares outstanding to RELTEC in its tender offer. RELTEC will
commence the public tender offer within the next fourteen days and expects
the transaction to close in the fourth quarter of 1998. The tender offer will
be subject to various agreed and customary conditions. The transaction will
be accounted for as a purchase. In connection with the merger, RELTEC expects
to record a one-time change to write off acquired in-process research and
development, estimated to be in the range of $90 million to $130 million.
Excluding one-time charges, the transaction is expected to be slightly
dilutive to earnings per share in the fourth quarter of 1998 and slightly
accretive to 1999 earnings per share.
NationsBanc Montgomery Securities LLC and Griffiths McBurney & Partners acted
as financial advisors and provided fairness opinions to PFS.
DISC*S-Registered Trademark- is a trademark of RELTEC Corporation. Advanced
Copper Solutions -SM- and Deep Fiber Solutions -SM- are service marks of
RELTEC Corporation, Positron OSIRIS -TM-, Positron OSIRIS-VUE -TM- and
Positron MIST -TM- are trademarks of Positron Fiber Systems Corporation.
Established in 1995, PFS is a leading manufacturer of innovative
telecommunications equipment for high reliability and critical service
applications. PFS provides solutions for the SONET and SDH broadband access
markets with its Positron OSIRIS -TM- family of broadband access
multiplexers, Positron MIST -TM- SONET transmultiplexers and Positron
OSIRIS-VUE -TM- network management systems. OSIRIS provides carriers with a
flexible platform designed for both central office and customer premise
applications and provides modular expansion from OC3 (155Mbps) to OC48
(2.5Gbps) in the field. Positron OSIRIS' unique size, ease of installation,
price and features allow carriers to reduce the costs of broadband service
provision while providing them with a cost-effective delivery vehicle for new
service offerings. Additional information is available on PFS website at
www.positronfiber.com
3
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RELTEC is a leader in the design, manufacture and sale of a broad range of
telecommunications systems, products and services. Its Access Systems,
Integrated Wireless Solutions and Network Components and Services are sold to
wireline and wireless service providers and OEMs around the globe. RELTEC
operates manufacturing plants in North America, Europe, Asia/Pacific and
Latin America with over 5,900 employees worldwide. Additional information is
available on the Company's website at www.relteccorp.com.
###
RELTEC Corporation Safe-Harbor Statement: The statements contained in this
press release that are not historical facts are to be considered
forward-looking statements. These forward-looking statements involve many
risks and uncertainties, including but not limited to, rapid technological
change, the importance of new products, uncertain markets for RELTEC's
systems and products, unpredictable sales cycles, competition, a changing
regulatory environment, customer concentration and numerous other risks which
have been set forth in documents filed by the Company with the Securities and
Exchange Commission. The Company advises the reader of these statements that
actual results or conditions may differ materially from those set forth
herein.
Positron Fiber Systems Corporation Safe-Harbor Statement: In this
announcement, Positron Fiber Systems Corporation makes forward-looking
statements within the meaning of U.S. federal securities laws that involve a
number of risks and uncertainties, including statements regarding the
company's expectations, beliefs, intentions or strategies regarding the
future. Among the factors that could cause actual future results to differ
materially from those anticipated are general competitive pressures in the
marketplace, the company's success in developing, introducing and gaining
market acceptance for new products, its customer and product concentration,
its dependence on suppliers, third party manufacturers and distributors, its
ability to manage expansion, its dependence on the success of an evolving
industry and factors such as changes in general economic conditions or
conditions in the specific markets for the company's products and government
regulation. Such risk factors and others are discussed in the company's
registration statement on Form F-1 as filed with the Securities and Exchange
Commission.
4
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[GRAPHIC] [GRAPHIC]
For Release
August 21, 1998
RCT-049-898
<TABLE>
<S> <C> <C>
RELTEC Contacts: Scott Fine Sherri Kightlinger
Vice President, Finance Manager, Corporate Communications
RELTEC Corporation RELTEC Corporation
440-460-3728 440-460-3741
[email protected] [email protected]
PFS Contact: Andrew Knott
Vice President, Sales and Marketing
Position Fiber Systems
609-222-1288
[email protected]
</TABLE>
- -------------------------------------------------------------------------------
RELTEC TO COMMENCE TENDER OFFER FOR ALL OUTSTANDING
POSITRON FIBER SYSTEMS COMMON SHARES
IN US$200 MILLION CASH TRANSACTION
Cleveland, OH--August 21, 1998--RELTEC Corporation (NYSE: RLT) and Positron
Fiber Systems Corporation (PFS) (NASDAQ:PFSCF, ME/TSE:PFS) today jointly
announced that RELTEC has commenced its tender offer to purchase all of the
outstanding common shares of PFS for US$13.625 per share in cash. The
aggregate value of the transaction is approximately US$200 million. RELTEC
and PFS jointly announced on August 11, 1998, that they had entered into a
definitive merger agreement. The Boards of Directors of both companies have
approved the transaction.
PFS' Board of Directors has unanimously recommended that PFS' shareholders
accept the RELTEC offer and tender their shares into the offer. Positron
Inc., PFS' largest shareholder, has agreed to tender shares representing
approximately 27 percent of PFS' outstanding shares into the offer.
NationsBanc Montgomery Securities LLC and Griffiths McBurney & Partners, the
financial advisors to PFS, have delivered opinions to PFS' Board of Directors
that the offer is fair from a financial point of view to the shareholders of
PFS. All of the directors and officers of PFS who hold or control PFS common
shares have indicated to the PFS Board of Directors their intention to accept
the offer.
The formal offer is being mailed to PFS' shareholders today, Friday, August
21, 1998. The tender offer will remain open for acceptance until 12:00
midnight, Eastern Time, September 11, 1998, unless withdrawn or extended. The
success of the offer is conditioned upon, among other things, the tendering
of shares representing at least 66-2/3 percent of PFS' common shares on a
fully diluted basis.
"We're very pleased with the opportunity this merger presents to advance our
position in providing access systems to telecommunications carriers
worldwide," said Dudley P. Sheffler, President and Chief Executive Officer of
RELTEC. "We are eager to finalize
<PAGE>
this combination as we expect it to have a positive impact on both
organizations' customers, shareholders and employees."
The dealer manager for the tender offer is J.P. Morgan Securities Canada Inc.
in Canada and J.P. Morgan Securities Inc. in the United States. The
depositary for the tender offer is CIBC Mellon Trust Company. D.F. King &
Co., Inc. is acting as information agent in the United States. Questions
concerning the tender offer may be directed to J.P. Morgan Securities Canada
Inc. in Canada at 416-981-9159 or to D.F. King & Co. in the U.S. at
800-758-5880.
The merger will be consummated following the successful completion of the
public tender offer for the common shares of PFS. RELTEC expects the
acquisition of PFS to close either late in the third quarter or during the
fourth quarter of 1998.
Established in 1995, PFS is a leading manufacturer of innovative
telecommunications equipment for high reliability and critical service
applications. PFS provides solutions for the SONET and SDH broadband access
markets with its Positron OSIRIS-TM- family of broadband access multiplexers,
Positron MIST-TM- SONET transmultiplexers and Positron OSIRIS-VUE-TM- network
management systems. OSIRIS provides carriers with a flexible platform
designed for both central office and customer premise applications and
provides modular expansion from OC3 (155Mbps) to OC48 (2.5Gbps) in the field.
Positron OSIRIS' unique size, ease of installation, price and features allow
carriers to reduce the costs of broadband service provision while providing
them with a cost-effective delivery vehicle for new service offerings.
Additional information is available on PFS' website at www.positronfiber.com.
RELTEC is a leader in the design, manufacture and sale of a broad range of
telecommunications systems, products and services. Its Access Systems,
Integrated Wireless Solutions and Network Components and Services are sold to
wireline and wireless service providers and OEMs around the globe. RELTEC
operates manufacturing plants in North America, Europe, Asia/Pacific and
Latin America with over 5,900 employees worldwide. Additional information is
available on the Company's website at www.relteccorp.com.
# # #
The statements contained in this press release that are not historical facts
are to be considered forward-looking statements. These forward-looking
statements involve many risks and uncertainties, including but not limited
to, rapid technological change, the importance of new products, uncertain
markets for RELTEC's systems and products, unpredictable sales cycles,
competition, a changing regulatory environment, customer concentration and
numerous other risks which have been set forth in documents filed by the
Company with the Securities and Exchange Commission. The Company advises the
reader of these statements that actual results or conditions may differ
materially from those set forth herein.
