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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 (Date of earliest event reported): September 7, 1999
Commission File No. 0-24833
FUTURELINK DISTRIBUTION CORP.
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(Exact Name of Registrant as Specified in Its Charter)
Colorado 95-3895211
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
300, 250 - 6th Avenue S.W., Calgary, Alberta CANADA T2P 3H7
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(Address of principal executive offices) (ZIP Code)
(403) 216-6000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. OTHER EVENTS
On September 7, 1999, the Registrant entered into agreements to acquire all
of the issued and outstanding shares of both Async Technologies, Inc. ("ATI") of
Detroit, Michigan and CN Networks, Inc. of Pleasanton, California, which carries
on business as Computer Networks, Inc. ("CNI"). For information regarding these
companies, please refer to the Registrant's press release of September 8, 1999
attached as an exhibit hereto.
The consideration to be paid to acquire ATI is approximately $6 million in
cash and $10 million of the Registrant's common stock at closing (at a price of
$7.63 per share, representing the ten day average of closing prices for the
common stock through September 3, 1999) with an additional $4 million in common
stock earnable for achievement of specified goals. Under terms of the agreement
with CNI, total consideration payable is approximately $4 million in cash and $9
million in the Registrant's common stock (also at $7.63 per share) at closing.
The Registrant's has paid approximately $1 million in deposit consideration in
conjunction with the execution of these agreements. The Registrant plans to
close these acquisitions at or about the end of October, 1999.
The almost $1 million of cash deposits were funded from the proceeds of the
Registrant's recently completed private placement offering through Commonwealth
Associates (see the Form 8-K of the Registrant filed August 3, 1999). The
Registrant plans to fund the roughly $9 million remaining cash portion of the
purchase consideration by raising additional debt and/or equity financing
between now and the closing of these transactions.
Please refer to the Registrant's press release of September 8, 1999
attached as an exhibit hereto for additional information regarding these
transactions.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) EXHIBITS:
99.1 News Release of the Registrant dated September 8, 1999
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FUTURELINK DISTRIBUTION CORP.
By: [signed: R. Kilambi] Date: September 14, 1999
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Raghu Kilambi, Chief Financial Officer
By: [signed: K.B.A. Scott] Date: September 14, 1999
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Kyle B.A. Scott, Corporate Secretary
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EXHIBIT INDEX
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Exhibit No. Page
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99 News Release of the Registrant dated September 8, 1999 4
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EXHIBIT 99
FutureLink to Acquire Two Leading Platinum Citrix Integrators,
Enhancing its Position as North America's
Leading Application Service Provider
Acquisitions will Expand Company to 285 Employees and
$40M plus in Annualized Revenues
IRVINE, CALIF., SEPTEMBER 8, 1999 -- Raghu Kilambi, FutureLink's CFO, is
pleased to announce that FutureLink Distribution Corp. (NASD-OTC-BB:FLNK), a
leading application service provider (ASP), has signed definitive agreements to
acquire two leading Citrix Systems server-based computing integrators for $33
million in stock and cash consideration, including $4 million in potential
stock earn out consideration for meeting performance goals. Closing of the
transactions is scheduled for October 31, 1999 and is subject to completion of
due diligence and financing contingencies.
Upon completion of the acquisitions of Async Technologies, Inc. (ATI) of
Detroit and CN Networks, Inc. operating as Computer Networks, Inc. (CNI) of
Pleasanton, Calif., FutureLink will add 47 employees in seven offices
(including San Francisco, Detroit and Chicago), a blue-chip client base that
includes Ford, General Motors, DaimlerChrysler, National Semiconductor, Silicon
Graphics and Alcoa, and $15 million plus in annualized revenues to FutureLink's
fast-growing corporate and hosted ASP businesses. When the ATI, CNI and the
June 1999 announced acquisition of Micro Visions transactions are completed by
the fourth quarter of 1999, FutureLink will have 285 employees and annualized
revenues of $40 million plus.
The closing of the acquisitions will add to FutureLink's growing brain trust of
server-based computing experts, giving the company one of the world's largest
staff of professionals focused on implementing Citrix (NASDAQ: CTXS)
server-based ASP solutions. FutureLink's Citrix-based ASP solutions allow
computer users to access virtually any application, across any type of network
connection via any type of client hardware.
FutureLink implements ASP solutions in two ways. In Corporate ASP
installations, FutureLink builds corporate server farms and provides Citrix
solutions integration services. With Corporate ASP solutions, customers manage
server farms, and provide ASP services to internal users using internal IT
staff and FutureLink on a consulting basis. FutureLink's Hosted ASP services
are managed by FutureLink staff from FutureLink data centers with application
capabilities provided to customers via dedicated telecom bandwidth and/or the
Internet. FutureLink's hosted ASP customers receive services ranging from
usage of a single application through complete desktop solutions, typically for
a flat monthly, per-seat fee.
Under terms of the agreement with ATI, total consideration to be paid is
approximately $6 million in cash, $10 million in FutureLink common shares upon
closing with an additional $4 million in common shares earnable for achievement
of specified goals. Under terms of the agreement with CNI, total consideration
is approximately $4 million in cash and $9 million in FutureLink common shares
upon closing. FutureLink has paid approximately $1 million in deposit
consideration in conjunction with the execution of the two definitive
agreements.
These transactions follow FutureLink's merger agreement with Micro Visions of
Irvine, California announced in June. Micro Visions is North America's leading
Citrix integrator. That transaction is slated to close shortly.
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"These acquisitions will give FutureLink the largest pool of integration
specialists who can implement server-based computing solutions, allowing us to
successfully accommodate rapidly increasing customer demand for our corporate
and hosted ASP services," said FutureLink's Executive Chairman, Phil Ladouceur.
"We also have a strong base now from which to expand our business globally."
"FutureLink has the right business model, channel strategy and team to define
and lead the ASP industry into the new millennium," said ATI's President Matthew
Schumacher. "We are pleased to join the FutureLink team in shaping how
businesses will access applications in the future."
"The application service provider model demands a keen technical understanding
of server-based computing technologies and system integration methodologies,"
said William Botti, president of CNI "No company has more experience or
expertise in helping companies advance to this new computing model than
FutureLink."
Philip Ladouceur, FutureLink's executive chairman and interim chief executive
officer (CEO) continues to serve as CEO of FutureLink. Glen Holmes, founder
and CEO of Micro Visions continues to run FutureLink's operations as President.
Matthew Schumacher, founder and CEO of ATI and William Botti, founder and CEO
of CNI will join FutureLink's management team. The combined company will
continue to be named FutureLink and be headquartered in Irvine, California.
ABOUT ASYNC TECHNOLOGIES, INC.
Founded in 1991 and based in Detroit, Async Technologies, Inc. is the leading
Citrix reseller and integrator in the Midwest with 24 employees and 1998
revenues of $6 million and was profitable. Async was North America's #7
Citrix integrator in 1998 and one of the top 10 Citrix resellers in 1997.
Async was also named the third fastest growing private company in the state of
Michigan in 1999. In addition to its Detroit headquarters, the company has
offices in Chicago, Cincinnati, Cleveland, Columbus, Indianapolis and
Pittsburgh.
ABOUT CN NETWORKS, INC.
Founded in 1991 and based in Pleasanton, Calif., CN Networks, Inc. is one of
North America's top 10 Citrix resellers ranking #4 in 1997 and #6 in 1998.
Profitable every year since inception, CNI is a leading systems integrator with
23 employees and 1998 revenues of $5.5 million. The company is focused on
providing server-based computing solutions in the San Francisco area. Computer
Networks, Inc, was ranked as a fast growth company being listed on Inc.
Magazine's 500 list for 1997 (#488) and 1998 (#470) and as #65 on the San
Francisco Business Times 1998 list of growth bay area companies.
ABOUT FUTURELINK DISTRIBUTION CORP.
FutureLink is a founder and leader of the Application Services Provider (ASP)
industry. According to Forrester Research Inc., the application outsourcing
market is projected to reach $20 billion by 2001. FutureLink provides small
and mid-sized businesses (10-1,000 employees) with off-site, Internet-based
computing, allowing subscribers to minimize hardware/software upgrade cycles,
precisely control total cost of technology ownership and focus on their core
businesses.
FutureLink, "The Computer Utility Company," offers computer and information
service as transparently and reliably as today's utilities deliver electricity,
water and telephone services. FutureLink's expertise in application hosting on
a monthly subscription basis, outsourcing and facility management, and business
practices consulting enables the company to offer an all-inclusive,
trouble-free computing service.
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With the announced acquisition of Micro Visions, set to close by the fourth
quarter, FutureLink becomes the #1 Citrix reseller and integrator of
server-based computing systems, which form the foundation of FutureLink's ASP
Computer Utility Service. This allows FutureLink's ASP subscribers to access
virtually any software application, across any type of network connection via
any type of client hardware at a predictable monthly price.
Headquartered in Irvine, California, FutureLink delivers its integrated ASP
services exclusively through its channel partners throughout North America. For
more information, please contact FutureLink toll-free at (877) 216-6001; e-mail:
[email protected]; or visit the FutureLink Web site at
http://www.futurelink.net.
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This news release contains forward-looking statements based on current
expectations, which involve risks and uncertainties. Our actual results could
differ materially from those anticipated in these forward-looking statements as
a result of many factors, including the risk factors set forth above and
elsewhere in this news release. The cautionary statements made in this news
release should be read as being applicable to all forward-looking statements
wherever they appear in the this news release.
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