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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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): October 11, 2000
Advanstar, Inc.
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(Exact Name of Registrant as Specified in Charter)
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Delaware 333-57201 94-3243499
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
545 Boylston Street
Boston, Massachusetts 02116
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(Address of Principal Executive (Zip Code)
Offices)
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Registrant's telephone number, including area code: (617) 267-6500
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Item 1. Change of Control of Registrant
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On October 11, 2000, Advanstar, Inc. (the "Registrant") and DLJ Merchant
Banking Partners III, L.P. ("DLJMB") announced the closing of the merger (the
"Merger") of Junior Jetman Corp., a subsidiary of DLJMB and affiliated funds and
entities (the "DLJMB Funds"), with and into the Registrant, with the Registrant
as the surviving corporation. The Merger was consummated pursuant to the
Agreement and Plan of Merger dated as of August 14, 2000, as amended by the
first amendment thereto dated as of October 10, 2000 (collectively, the "Merger
Agreement", in substantially the form attached hereto as Exhibits 2.1 and 2.2)
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among the Registrant, Advanstar Holdings Corp. (formerly known as Jetman
Acquisition Corp.) (the "Buyer"), a subsidiary of the DLJMB Funds, Junior Jetman
Corp., a wholly-owned subsidiary of the Buyer, and AHI Advanstar LLC, the then
sole stockholder of the Registrant. Prior to the effective time of the Merger,
AHI Advanstar LLC was dissolved and the voting securities of Registrant held by
AHI Advanstar LLC were distributed to its members pursuant to the terms of its
limited liability company agreement (including Hellman & Friedman Capital
Partners III, L.P. which, upon such distribution, held a majority of the voting
securities and control of the Registrant). As a result of the consummation of
the Merger, the Buyer became the owner of 100% of the voting securities of the
Registrant and thereby acquired control of the Registrant.
At the effective time of the Merger, all of the outstanding capital stock,
and all of the outstanding options and warrants to purchase capital stock, of
the Registrant not then held by Buyer were exchanged for cash and securities of
Buyer.
In the Merger, the selling stockholders and optionholders of Registrant
received (i) cash payable at the closing of approximately $292.2 million and
(ii) 595,504 shares of Buyer's common stock, representing approximately 2% of
the issued and outstanding common stock of Buyer. In addition, $58.0 million was
deposited into escrow accounts to satisfy certain potential obligations and
costs that may become payable to Buyer or the Registrant after the closing of
the Merger. The selling stockholders and optionholders also may be entitled to
receive additional cash consideration after the closing, to the extent the
escrowed amounts are not required to satisfy those obligations and costs and to
the extent proceeds are realized from the warrant to purchase shares of
PurchasePro.com, Inc. held by Advanstar IH, Inc., a wholly-owned subsidiary of
the Registrant, prior to the Merger. In addition, holders of warrants to
purchase shares of the Registrant's common stock that were outstanding at the
closing of the Merger received, in the aggregate, warrants to purchase 1,260,629
shares of Buyer's common stock at an exercise price of $30.00 per share.
The Merger was financed by (i) approximately $415.0 million of new
borrowings made by Advanstar Communications Inc., a wholly-owned subsidiary of
the Registrant, under the Credit Agreement dated as of October 11, 2000 (in
substantially the form attached hereto as Exhibit 99.2), which provides for
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$415.0 million of term loan availability (used to fund the borrowings to fund
the Merger) and $80.0 million of revolving loan availability, with a group of
financial institutions led by DLJ Capital Funding, Inc., an affiliate of the
DLJMB Funds; (ii) approximately $50.0 million of proceeds from the issuance of
(1) the Registrant's 15% senior discount notes due 2011 with a principal amount
at maturity of $103.1 million and (2) warrants to purchase 857,541 shares of
Buyer's common stock, which were
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issued to several institutional investors, including DLJ Investment Partners II,
L.P., an affiliate of the DLJMB Funds, and related funds, and (iii)
approximately $291.0 million in proceeds from the sale of Buyer's common stock
to the DLJMB Funds.
Prior to the effective time of the Merger, Robert L. Krakoff and James M.
Alic, members of the Registrant's management, contributed a portion of their
shares of Registrant's common stock to Buyer in exchange for 559,598 shares of
the Buyer's common stock, constituting approximately 1.8% of Buyer's common
stock outstanding after the effective time of the Merger. At the effective time
of the Merger, Robert L. Krakoff and James Alic also purchased an aggregate of
550,000 shares of the Buyer's common stock from Buyer.
At the effective time of the Merger, (A) the certificate of incorporation
and the by-laws of the Registrant became the certificate of incorporation and
the by-laws of the Registrant as the surviving corporation, (B) all of the
directors of the Registrant, except for Robert L. Krakoff, resigned from the
board of directors of the Registrant and (C) the new board of directors of the
Registrant consisted of Robert L. Krakoff, David M. Wittels and OhSang Kwon.
As of October 26, 2000, the new board of directors of the Registrant consisted
of Robert L. Krakoff, David M. Wittels, OhSang Kwon, James M. Alic and James A.
Quella.
As of the date of this report, to the knowledge of the Registrant, there
are no arrangements which would operate to result in a change of control of the
Registrant at a date subsequent to the date of this report.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits:
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Exhibit No. Description
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2.1 Agreement and Plan of Merger dated August 14, 2000
among Advanstar, Inc., Advanstar Holdings Corp.
(formerly known as Jetman Acquisition Corp.),
Junior Jetman Corp. and AHI Advanstar LLC.*
2.2 First Amendment dated October 10, 2000 to the
Agreement and Plan of Merger dated August 14, 2000
among Advanstar, Inc., Advanstar Holdings Corp.
(formerly known as Jetman Acquisition Corp.),
Junior Jetman Corp. and AHI Advanstar LLC.
99.1 Press release of the Registrant dated August 14,
2000.
99.2 Credit Agreement dated as of October 11, 2000
among Advanstar Communications Inc., a wholly
owned subsidiary of the Registrant, Fleet National
Bank, as administrative agent for the lenders, DLJ
Capital Funding, Inc., as syndication agent for
the lenders, DLJ
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Capital Funding, Inc., as documentation agent for
the lenders, and the various lenders named
thereto.
99.3 Press release of the Registrant dated October 11,
2000.
* The exhibits and schedules to the Merger Agreement are not being filed
herewith. The Registrant undertakes to furnish supplementally a copy of any
omitted schedule or exhibit to the Commission upon request. Pursuant to Item
601(b)(2) of Regulation S-K, set forth below is a list of the omitted exhibits
and schedules (references to the "Company" below shall be deemed to refer to the
Registrant).
SCHEDULES
Schedule 3.2(a) Conflicts
Schedule 3.2(b) Consents
Schedule 3.5 Subsidiaries of the Company
Schedule 3.6(c) Authorized Capital Stock of the Subsidiaries; Equity
Interests
Schedule 3.6(d) Joint Ventures
Schedule 3.6(e) Options
Schedule 3.6(f) Agreements with Respect to Common Stock
Schedule 3.8 Events Subsequent to December 31, 1999
Schedule 3.9(b) Extensions, etc.
Schedule 3.9(c) Tax Filing Groups; Income Tax Jurisdictions
Schedule 3.9(d) Assessments, Deficiencies, etc.
Schedule 3.9(f) Tax Sharing Agreements
Schedule 3.9(j) Tax Information on Balance Sheet
Schedule 3.10 Litigation
Schedule 3.11 Compliance with Laws
Schedule 3.12(a) Plans
Schedule 3.12(g) Effect of Consummation on Employee Benefits
Schedule 3.14(a) Owned Real Property
Schedule 3.14(b) Liens
Schedule 3.15(a) Leased Real Property
Schedule 3.15(b) Lease Exceptions
Schedule 3.17(a) Intellectual Property Rights
Schedule 3.18 Contracts
Schedule 3.19 Insurance
Schedule 3.23(b) Disclosed Liabilities
Schedule 3.24 Affiliate Transactions
Schedule 5.1 Conduct of the Company and its Subsidiaries
EXHIBITS
Exhibit A Escrow Agreement Termsheet
Exhibit B Shareholders Agreement Termsheet
Exhibit C Warrant Termsheet
Exhibit D Employment Agreements
Exhibit E Management Equity Arrangements Termsheet
Exhibit F Form of Noncompetition Agreement
Exhibit G Capital Contribution Termsheet
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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 authorized officer.
ADVANSTAR, INC.
October 26, 2000
By: /s/ David W. Montgomery
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David W. Montgomery
Vice President--Finance and Chief
Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Agreement and Plan of Merger dated August 14, 2000 among Advanstar
Holdings Corp. (formerly known as Jetman Acquisition Corp.), Junior
Jetman Corp., Advanstar, Inc. and AHI Advanstar LLC.
2.2 First Amendment dated October 10, 2000 to the Agreement and Plan of
Merger dated August 14, 2000 among Advanstar Holdings Corp. (formerly
known as Jetman Acquisition Corp.), Junior Jetman Corp., Advanstar,
Inc. and AHI Advanstar LLC.
99.1 Press release of the Registrant dated August 14, 2000.
99.2 Credit Agreement dated as of October 11, 2000 among Advanstar
Communications Inc., a wholly owned subsidiary of the Registrant,
Fleet National Bank, as administrative agent for the lenders, DLJ
Capital Funding, Inc., as syndication agent for the lenders, DLJ
Capital Funding, Inc., as documentation agent for the lenders, and
the various lenders named thereto.
99.3 Press release of the Registrant dated October 11, 2000
