<PAGE> 1
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): November 15, 1999
Commission File No. 0-24833
FUTURELINK CORP.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-4763404
- ------------------------------------------ ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
100, 6 Morgan, Irvine, California 92618
- -------------------------------------------------------------------- -----------
(Address of principal executive offices) (ZIP Code)
(949) 837-8252
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
a) On November 15, 1999, the Registrant agreed to acquire all of the
issued and outstanding shares of UK based KNS Holdings Limited, d.b.a. KNS
Distribution ("KNS"), the largest distributor of Citrix products outside the
U.S. For information regarding KNS, please refer to the Registrant's press
release of November 16, 1999 attached as an exhibit hereto.
The consideration to be paid to acquire KNS is approximately $11.9
million in cash and $32.4 million of Registrant's common stock at closing. The
Registrant plans to close this acquisition at or about the end of 1999.
Please refer to the Registrant's press release of November 16, 1999
attached as an exhibit hereto for additional information regarding these
transactions.
b) On December 2, 1999, the Registrant entered into an agreement to
acquire all of the issued and outstanding shares of Maryland-based Vertical
Software, Inc., d.b.a. VSI Technology Solutions ("VSI"), a Citrix Solutions
provider. For information regarding this company, please refer to the
Registrant's press release dated December 3, 1999 attached as an exhibit hereto.
The consideration to be paid to acquire VSI is approximately $7 million
in cash and $19.5 million in the registrant's common stock. The Registrant plans
to close this acquisition at or about the end of January 2000.
Please refer to the Registrant's press release dated December 3, 1999
attached as an exhibit hereto for additional information regarding this
transaction.
c) On December 9, 1999 the Registrant announced a partnership with
Compaq Computer Corporation ("Compaq") to build the Registrant's data centers
exclusively with Compaq server solutions and services. Compaq has extended the
Registrant a $20 million lease line of credit to provision the Registrant's data
centers.
Compaq has also made a $2.2 million equity investment in the
Registrant with the proceeds dedicated to joint marketing efforts to promote the
Registrant's hosted ASP services featuring Compaq hardware. For more information
regarding this transaction, please refer to the Registrant's press release dated
December 9, 1999 attached as an exhibit hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) EXHIBITS:
99.1 News Release of the Registrant dated November 16, 1999
99.2 News Release of the Registrant dated December 3, 1999
99.3 News Release of the Registrant dated December 9, 1999
2
<PAGE> 3
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 CORP.
By: [signed: R. Kilambi] Date: December 13, 1999
--------------------------------------------
Raghu Kilambi, Chief Financial Officer
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page
- ----------- ----
<C> <C> <C>
99.1 News Release of the Registrant dated November 16, 1999 5
99.2 News Release of the Registrant dated December 3, 1999 7
99.3 News Release of the Registrant dated December 9, 1999 9
</TABLE>
4
<PAGE> 1
EXHIBIT 99.1
FUTURELINK CORP.
FUTURELINK ANNOUNCES ACQUISITION OF UK-BASED KNS DISTRIBUTION,
A LEADING INTERNATIONAL CITRIX DISTRIBUTOR
Leading North American ASP Becomes Global With Strategic European
Acquisition That Adds Over 360 Channel Partners
IRVINE, CALIF. AND LONDON, ENGLAND NOV. 16, 1999-- FutureLink Corp. (OTC: FLNK),
the leading Application Service Provider (ASP) with the largest installed base
of application hosting platforms, today announced the acquisition of UK-based
KNS Distribution Limited (KNS), the largest distributor of Citrix products
outside of the US, in a transaction worth approximately $44.3 million (27
million pounds). For the fiscal year ended February 28, 1999, KNS' distribution
operations had revenues of $14.5 million (8.8 million pounds), and for the six
months ended August 31, 1999, KNS' distribution operations recorded revenue of
approximately $10.5 million (6.4 million pounds), representing a growth rate in
excess of 50 percent over the same period last year
Under the terms of the agreement, KNS will receive $11.9 million (7.25 million
pounds) in cash and deferred cash consideration, and $32.4 million (19.75
million pounds) in FutureLink stock in a transaction that is expected to close
in late 1999.
The acquisition creates a dominant global force in the rapidly expanding ASP
market, coupling FutureLink's vast array of strategic partnerships and
relationships with KNS' product know-how and excellent industry reputation. It
also establishes FutureLink as one of the largest worldwide ASPs with a
significant presence in the US, Canada and now Europe. KNS' positioning in the
UK provides an excellent platform for growth throughout Europe and provides a
critical link in providing customers truly global ASP hosted services. Current
management team will continue in their present roles. Phil Ladouceur will join
the KNS Board as chairman.
KNS, Europe's leading distributor of Citrix technology and consulting services,
has more than 360 resellers for its product lines, which include remote access,
server-based computing solutions and radio Ethernet. The Newbury,
Berkshire-based company, with offices in Edinburgh, also offers video
conferencing, e-business, training, consultancy and maintenance services and
currently employs a technical and professional staff of 44.
The target market for the ASP offering from FutureLink is small and medium-sized
companies comprised of 10 to 1,000 employees. The services will be sold
exclusively via the KNS channel of 360 active U.K. resellers and a new ASP
division will be set up to sell and support the business unit utilizing existing
skill sets within KNS and recruiting additional staff. With this acquisition,
FutureLink has the first international and largest ASP channel in the world.
"FutureLink is committed to building a world class application hosting platforms
organization," said Philip R. Ladouceur, chairman and CEO of FutureLink. "KNS is
a key part of that strategy; their technical expertise and superlative business
practices made them our first choice for entering the European market."
"Teaming with the top thin-client technology experts at FutureLink is a
tremendous technical and business opportunity," said KNS Founder and Chairman,
John Bennett. "We're looking forward to expanding our presence in the worldwide
market and, as part of FutureLink, growing our already significant presence in
Europe."
5
<PAGE> 2
ABOUT KNS
KNS Distribution Limited (KNS) is a leading distributor of technology solutions
to the United Kingdom. KNS has been the top Citrix distributor in the world,
excluding the United States in l996, l997 and l998. KNS has headquarters in
Newbury, Berkshire, United Kingdom with offices in Edinburgh, Scotland. KNS has
over 360 active resellers for six product lines and employs a professional and
technical staff of 44.
ABOUT FUTURELINK
FutureLink, The Computer Utility Company(TM) is a founder of the Application
Service Provider (ASP) industry and a founding member of the ASP Industry
Consortium. The company has the largest installed base of application hosting
platforms with thousands of customers worldwide.
FutureLink's Application Hosting Services Division provides businesses with
off-site, Internet-based computing, allowing subscribers to escape costly
hardware/software upgrade cycles, precisely control total cost of technology
ownership and focus on their core businesses. The division offers customers an
all-inclusive, trouble-free ASP service at a predictable price and provides
computing service as transparently and reliably as today's utilities deliver
electricity, water and telephone service.
The company's Application Hosting Platforms Division builds application server
farms and provides Citrix application server software integration services. With
Application Hosting Platform solutions, FutureLink customers manage their own
server farms, and provide ASP services to users with their own IT staff and
FutureLink consultants.
For more information, contact FutureLink toll-free at (877) 216-6001; e-mail:
[email protected]; or visit the FutureLink Web site at
http://www.futurelink.net.
###
Forward-looking statements and comments in this news release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Such
statements relating to, among other things, the prospects for the companies to
complete the transaction and enhance operating results, are necessarily subject
to risks and uncertainties, some of which are significant in scope and nature.
These risks may be further discussed in periodic reports and registration
statements to be filed by the company from time to time with the Securities and
Exchange Commission in the future.
6
<PAGE> 1
EXHIBIT 99.2
FUTURELINK CORP.
FUTURELINK ANNOUNCES DEFINITIVE AGREEMENT TO ACQUIRE
LEADING CITRIX INTEGRATOR - VSI TECHNOLOGY SOLUTIONS
Acquisition To Expand FutureLink's Application Hosting Platform
Market Presence
RVINE, CALIF. DEC. 3, 1999-- FutureLink Corp. (OTC: FLNK), the leading
Application Service Provider (ASP) with the largest installed base of
application hosting platforms, today announced that it has signed a definitive
agreement to acquire Maryland-based VSI Technology Solutions ("VSI"), a leading
provider of Application Hosting Platform solutions, for a total value of $26.5
million.
Under the terms of the agreement, VSI's shareholders will receive $7.0
million in cash and $19.5 million in FutureLink stock. The transaction is
expected to close by January 31, 2000.
VSI, a leading mid-Atlantic region Citrix Solutions Provider, provides
medium to large businesses with solutions for rapid application deployment of
business critical applications and solutions to reduce the total cost of
hardware ownership. VSI's application hosting platform solutions are based on
Microsoft Windows NT, Terminal Server Edition, and Citrix MetaFrame application
hosting platform solutions. The firm currently employs a technical and
professional staff of over 75. For the nine months ended September 30, 1999, VSI
had revenues of $9.3 million, representing a 45% increase over the same period
in 1998.
"VSI's technical expertise will contribute greatly to our core competencies as
we continue to build the infrastructure necessary to assemble a world class
application hosting platforms organization," said Philip R. Ladouceur, CEO and
Executive Chairman of FutureLink. "The acquisition also gives FutureLink a
significant presence in the mid-Atlantic region, complementing our existing
presence in the Southeast."
"VSI recognizes the tremendous potential that is unlocked by being a part of
FutureLink", said Curtis Eshelman, President of VSI and Chris Harvey,
Vice-President. "We have seen the potential of Application Hosting Platform
solutions and are ready to embrace Application Hosting Services as a solution
for our rapidly expanding customer base. As a leader in the mid-Atlantic region,
the vision VSI brings to Futurelink will catalyze the growth of the Application
Hosting Services model ".
On a pro forma basis, including the acquisitions of MicroVisions, CNI, the
recently-completed acquisition of Async Technologies, the recently announced
definitive agreement for the acquisition of KNS Distribution of the UK, and VSI,
FutureLink's revenues for the nine months ended September 30, 1999 would have
been in excess of $58 million.
ABOUT VSI TECHNOLOGY SOLUTIONS
Founded in l989 and based in Beltsville, Maryland, VSI is a leading Citrix
reseller and integrator in the mid-Atlantic region with over 75 employees and
unaudited l998 revenues of $9.7 million. VSI was among North America's top 5
largest Citrix integrators in l998 and was one of the top 10 Citrix resellers in
l997. In addition to its Beltsville headquarters, the company has offices
throughout Virginia and conducts business across the entire East Coast.
7
<PAGE> 2
ABOUT FUTURELINK
FutureLink, The Computer Utility Company(TM) is a founder of the Application
Service Provider (ASP) industry and a founding member of the ASP Industry
Consortium. The company has one of the largest installed bases of application
hosting platforms with thousands of customers worldwide.
FutureLink's Application Hosting Services Division provides businesses with
off-site, Internet-based computing, allowing subscribers to escape costly
hardware/software upgrade cycles, precisely control total cost of technology
ownership and focus on their core businesses. The division offers customers an
all-inclusive, trouble-free ASP service at a predictable price and provides
computing service as transparently and reliably as today's utilities deliver
electricity, water and telephone service.
The company's Application Hosting Platforms Division builds application server
farms and provides Citrix application server software integration services. With
Application Hosting Platform solutions, FutureLink customers manage their own
server farms, and provide ASP services to users with their own IT staff and
FutureLink consultants.
For more information, contact FutureLink toll-free at (877) 216-6001; e-mail:
[email protected]; or visit the FutureLink Web site at
http://www.futurelink.net.
###
Forward-looking statements and comments in this news release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Such
statements relating to, among other things, the prospects for the companies to
complete the transaction and enhance operating results, are necessarily subject
to risks and uncertainties, some of which are significant in scope and nature.
These risks may be further discussed in periodic reports and registration
statements to be filed by the company from time to time with the Securities and
Exchange Commission in the future.
8
<PAGE> 1
EXHIBIT 99.3
FUTURELINK CORP.
COMPAQ COMPUTER CORPORATION AND FUTURELINK FORM STRATEGIC PARTNERSHIP TO BUILD
OUT ASP DATA CENTERS AND AGGRESSIVELY MARKET HOSTING SERVICES
IRVINE, CALIF. - DEC. 9, 1999 - FutureLink Corp. (OTC BB: FLNK), the leading
Application Service Provider (ASP) with the largest installed base of
application hosting platforms, today announces a partnership with Compaq
Computer Corporation (NYSE: CPQ) to build out FutureLink's data centers
exclusively with Compaq server solutions and services. Compaq has made an equity
investment in common shares of FutureLink with proceeds to be used for
co-marketing FutureLink's hosted application solutions.
The ASP industry is a rapidly emerging segment of the computer industry which,
according to Forrester Research Inc., is projected to reach $6 billion by 2001.
ASPs manage and deliver application capabilities to multiple entities from data
centers across a wide area network. Through its network of data centers,
FutureLink provides its ASP customers with access to complete computing
solutions for a monthly subscription fee. FutureLink's service allows
organizations to outsource all computing service and support, and precisely
manage the total cost of technology ownership.
Under the terms of the agreement, Compaq has extended FutureLink a $20 million
lease line of credit with which to provision FutureLink's data centers
exclusively with Compaq server solutions and services. Compaq's high
availability servers will provide FutureLink customers world-class management
and performance of applications. FutureLink will initially deploy Compaq's
products in its Irvine, Calif. and Calgary data centers. Additional data centers
will be operational in 2000.
Compaq's $2.2 million equity investment in FutureLink will be dedicated to joint
marketing efforts to promote FutureLink's hosted ASP services featuring Compaq
hardware. Joint marketing programs will allow Compaq and FutureLink to align the
strengths of their partners and channels.
"Compaq's partnership is an endorsement of our strategy with substantial
financial support that will accelerate our growth," said FutureLink's Chief
Executive Officer Philip R. Ladouceur. "This enables FutureLink to meet the
burgeoning customer demand for additional data center capacity and gives us the
marketing support to meet our aggressive growth objectives."
FutureLink President and Chief Operating Officer Glen C. Holmes added
"FutureLink currently uses and installs Compaq servers in application hosting
platforms implemented at customer sites. Compaq's state-of-the-art technology
ensures that our customers enjoy access to their applications with the speed,
simplicity and service of a utility."
"FutureLink has tapped the pent up demand for application services by offering a
new and cost-effective IP option for enterprises," said Eduardo Pontoriero, vice
president of Compaq's service provider business unit. "This partnership
showcases Compaq's ability to move quickly, to offer the solutions and financing
service providers need and to demonstrate Compaq's commitment to FutureLink's
growth."
In mid-October a syndicate, led by Pequot Capital Management, invested $50
million in FutureLink in exchange for newly issued shares of Common Stock and
Warrants. The funding enabled FutureLink to complete its announced acquisitions
of Micro Visions of Irvine, Calif., Computer Networks, Inc. of Pleasanton,
Calif. and Async Technologies, Inc. of Detroit, all
9
<PAGE> 2
leading North American Citrix resellers and systems integrators. In the fourth
quarter, FutureLink announced definitive agreements to acquire VSI Technology
Solutions, a leading mid-Atlantic server-based computing integrator and KNS,
Europe's leading distributor of Citrix technology and consulting services, with
a channel of 360 active U.K. resellers. These acquisitions establish FutureLink
as one of the largest worldwide ASPs with a significant presence in the US,
Canada and now Europe.
ABOUT FUTURELINK
FutureLink, The Computer Utility Company(TM), is a founder of the Application
Service Provider (ASP) industry and a founding member of the ASP Industry
Consortium. The company has the largest installed base of application hosting
platforms with thousands of customers worldwide.
FutureLink's Application Hosting Services Division provides businesses with
off-site, Internet-based computing, allowing subscribers to escape costly
hardware/software upgrade cycles, precisely control total cost of technology
ownership and focus on their core businesses. The division offers customers an
all-inclusive, trouble-free ASP service at a predictable price and provides
computing service as transparently and reliably as today's utilities deliver
electricity, water and telephone service.
The company's Application Hosting Platforms Division builds application server
farms and provides Citrix application server software integration services. With
Application Hosting Platform solutions, FutureLink customers manage their own
server farms, and provide ASP services to users with their own IT staff and
FutureLink consultants.
For more information, contact FutureLink toll-free at (877) 216-6001; e-mail:
[email protected]; or visit the FutureLink Web site at
http://www.futurelink.net.
###
Forward-looking statements and comments in this news release are made pursuant
to safe harbor provisions of the Securities Exchange Act of 1934. Such
statements relating to, among other things, the prospects for the companies to
complete the transaction and enhance operating results, are necessary subject to
risks and uncertainties, some of which are significant in scope and nature.
These risks may be further discussed in periodic reports and registration
statements to be filed by the company from time to time with the Securities and
Exchange Commission in the future.
10
