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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
Date of Report (Date of earliest event reported) December 18, 1998
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IDG BOOKS WORLDWIDE, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-24617 04-3078409
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
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919 East Hillsdale Blvd., Suite 400, Foster City, CA 94404
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (650) 655-3000
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report.)
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Item 2. Acquisition or Disposition of Assets
(a) On December 18, 1998, IDG Books Worldwide, Inc. (the "Company")
acquired all of the capital stock of Cliffs Notes, Inc. ("Cliffs
Notes"), a privately-held publisher of popular literary study guides,
from the founder of Cliffs Notes, certain of his family members and
other shareholders. The acquisition price was approximately $17.6
million, which included balance sheet adjustments for net tangible
assets delivered at closing. The purchase price was determined as a
result of arm's length negotiations between senior management of the
Company and Cliffs Notes. The Company funded the acquisition with
approximately $13.2 million in cash from operations and approximately
$4.4 million in borrowings based on a credit agreement, dated as of
August 27, 1998, between the Company and Wells Fargo Bank. A copy of
the Company's press release dated December 7, 1998 is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
(b) Certain of the assets of Cliffs Notes constitute plant, equipment and
other physical property, particularly furniture, fixtures and
leasehold improvements used in the business of Cliffs Notes as
described elsewhere herein, and the Company intends to continue such
use.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The Company is currently evaluating the requirement to file historical
financial statements and pro forma financial information. If required to do
so, the Company will file the applicable financial information within 75
days of this reportable event.
(a) Financial Statements of Business Acquired.
To be filed by amendment when such financial statements are available,
if applicable.
(b) Pro Forma Financial Information.
To be filed by amendment when such pro forma financial information is
available, if applicable.
(c) Exhibits Description
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2.1* Share Purchase Agreement dated December 7, 1998 by and among the Company, Cliffs Notes
and the Shareholders of Cliffs Notes.
99.1 Press release of IDG Books Worldwide, Inc. dated December 7, 1998.
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* Incorporated by reference from the Registrant's Report on Form
10-K (File No. 000-24617), filed with the Securities and Exchange
Commission on December 28, 1998.
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.
IDG Books Worldwide, Inc.
Date: January 4, 1999 By: /s/ James A. Doehrman
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James A. Doehrman
Vice President and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
No. Document
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2.1* Share Purchase Agreement dated December 7, 1998 by and among the Company, Cliffs Notes
and the Shareholders of Cliffs Notes.
99.1 Press release of IDG Books Worldwide, Inc. dated December 7, 1998.
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* Incorporated by reference from the Registrant's Report on Form
10-K (File No. 000-24617), filed with the Securities and Exchange
Commission on December 28, 1998.
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EXHIBIT 99.1
Contact:
Mimi Sells Kristine Mozes
IDG Books Worldwide, Inc. Stapleton Communications Inc.
650-655-3000 650-470-4224
IDG BOOKS WORLDWIDE, INC. TO ACQUIRE CLIFFS NOTES
Best-Selling Publisher Adds Another Name Brand
Foster City, Calif. - Dec. 07, 1998 - IDG Books Worldwide, Inc. (Nasdaq: IDGB),
today announced it has signed a stock purchase agreement to acquire Cliffs
Notes, a privately-held publisher of the popular literary study guides. IDGB is
a global knowledge company whose diverse portfolio includes many best-selling
book brands and computer-based learning tools, including the For Dummies(R)
brand which has more than 60 million books in print.
The acquisition price is approximately $14.2 million, plus balance sheet
adjustments, for 100 percent of Cliffs Notes' stock. The acquisition is expected
to close by the end of the year, subject to certain conditions being met.
"Cliffs Notes is beloved by millions of students who have relied on its popular
Notes and study guides to help them learn about literature and to prepare for
junior high, high school and college tests," said Steven Berkowitz, IDGB's
president. "Cliffs has also stayed in touch with its customers by creating a
powerful Web presence at Cliffs.com. At IDGB, we have built our reputation on
creating best-selling brands that help people make the most of their work and
personal lives. Cliffs Notes is a natural fit with our strategy of making
learning enjoyable, accessible and affordable in both print and online formats."
"We believe Cliffs Notes will benefit from the excellent branding, editorial,
global sales, marketing and print and online distribution capabilities of IDG
Books," said Robert Covolik, president of Cliffs Notes. Covolik has agreed to
remain as general manager of Cliffs Notes and will help with the transition.
Cliff Hillegass, the founder and chairman of Cliffs Notes gave his support to
the acquisition. "I am so proud of the success of Cliffs Notes. This is a great
day for the company we started 40 years ago. It is very rewarding to know that
our company has helped so many young people succeed in school. I devoted my
career to building Cliffs Notes and I am happy that the work I started will be
continued by IDG Books because they also care about making learning enjoyable
and rewarding. This is a great match for both of us."
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IDG Books Worldwide to Acquire Cliffs Notes
Dec. 07, 1998
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"Cliffs Notes, like Dummies, are a part of Americana," said IDGB's Berkowitz.
"We are very excited to add this venerable brand to our portfolio. We believe
its brand recognition offers us unique opportunities to publish in numerous
other areas where there is strong and repeat demand for authoritative brands
that provide quick and reliable access to critical information in areas such as
personal finance and information technology."
Conference Call
The company will hold a conference call to discuss the acquisition on Tuesday
Dec. 8 at 9:00 a.m. eastern time. The conference call number is 706-645-9716. A
replay will be available until 11 p.m. Wednesday night, Dec. 9, by calling
706-645-9291, conference ID 651350.
About Cliffs Notes
Cliffs Notes currently publishes about 300 reference titles including its
original Notes plus Quick Reviews of high school and college courses, Test
Preparation guides, Advanced Placement guides and test preparation software.
Each literary Notes study guide is written by academics who provide commentary
and analysis of classic works. Among the most popular Cliffs Notes literary
guides are those for The Scarlet Letter and Hamlet.
The Lincoln, Neb. company was founded in 1958 by Cliff Hillegass. Cliffs Notes
has helped generations of students gain the extra edge they need to succeed in
English and other academic subjects. Establishing a strong bond with students
and teachers, Cliffs Notes has become a popular destination on the web, as well.
Cliffs Notes titles can be purchased and downloaded at www.cliffs.com.
About IDG Books Worldwide
IDG Books Worldwide, Inc., headquartered in Foster City, Calif., is a leading
global knowledge company featuring a diverse portfolio of technology, business
and self-help books and computer-based learning tools, including the
best-selling ...For Dummies(R), ...Secrets(R) and Teach Yourself(R) brands. IDG
Books Worldwide has more than 700 active titles plus translations in 36
languages around the world. More information about IDG
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IDG Books Worldwide to Acquire Cliffs Notes
Dec. 07, 1998
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Books Worldwide is available from the company's SEC filings or by visiting its
World Wide Web site, http://www.idgbooks.com. Information about our ...For
Dummies(R) brand can also be found at http://www.dummies.com. IDG Books
Worldwide is a subsidiary of International Data Group, a leading global provider
of information technology media, research, conferences and expositions.
This news release contains forward-looking statements that involve a number of
risks and uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements are delays in product development, competition from increased
development of the Internet market, changes in product pricing policies, other
competitive pressures, and the risk factors detailed from time to time in the
company's periodic reports and registration statements filed with the Securities
and Exchange Commission.
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