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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): August 24, 1995
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-1969 52-0278528
(State of other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
8100 34th Avenue South, Minneapolis, Minnesota 55425
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (612-853-8100)
(Former name or former address, if changed since last report)
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Item 5. Other Events
On August 24, 1995, Ceridian Corporation ("eridian") announced that
it had entered into an Agreement and Plan of Merger dated as of August 23,
1995 (the "Merger Agreement") with Comdata Holdings Corporation
("Comdata") pursuant to which Comdata will become a wholly-owned
subsidiary of Ceridian as the result of the merger of a newly created
subsidiary of Ceridian into Comdata (the "Merger"). The Merger Agreement
provides that as a result of the Merger, each outstanding share of common
stock of Comdata will be converted into the right to receive shares of
Ceridian common stock at an exchange ratio (the "Exchange Ratio") of .57
shares of Ceridian common stock for each share of Comdata common stock, and
each share of Comdata's Series B and C preferred stock (other than shares,
if any, as to which disssenters' rights of appraisal are validly exercised
and not withdrawn) will be converted into the right to receive the
number of shares of Ceridian common stock equal to the product of
the Exchange Ratio and the number of shares of Comdata common stock into
which such shares of Comdata preferred stock are convertible into Comdata
common stock. It is expected that approximately 21.6 million shares
of Ceridian common stock will be issued to effect the Merger, having a
value of approximately $900 million based on the closing price of
Ceridian's common stock on August 23, 1995. The Merger is intended to be
tax free to Comdata's shareholders and to be accounted for as a "pooling
of interests."
Comdata provides financial transaction and information services to the
transportation and gaming industries. Comdata serves the transportation
industry by assisting trucking companies and truck stops with data-
intensive operations such as cash advances to drivers, driver settlement,
money transfer, load matching, route planning, fuel purchase, fuel tax
reporting and permit delivery. Comdata serves the gaming industry by
providing cash advance services to patrons at gaming locations nationwide.
Comdata is headquartered in Brentwood, Tennessee, and its common stock
trades on the NASDAQ National Market System under the symbol "CMDT." For
the year ended December 31, 1994 and the six months ended June 30, 1995,
Comdata reported the following:
Year ended Six months ended
December 31, 1994 June 30, 1995
($ in millions)
Revenue
$243.3 $131.5
Earnings before interest
and taxes 62.0 34.0
Interest expense 30.6 14.9
Net earnings 28.1 12.8
At June 30, 1995, Comdata reported total assets of $288.8 million, total
liabilities of $364.6 million (including total debt of $226.5 million), and
a total stockholders' deficit of $75.8 million.
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The Merger is subject to the approval of the shareholders of Comdata
and Ceridian, to certain other conditions, including no changes in reported
ownership of Ceridian stock prior to or as result of the Merger that
would affect the continuing full availability of Ceridian's
net operating loss carryforwards, and to certain regulatory matters,
including completion of the Hart-Scott-Rodino process. The Merger
transaction is expected to be completed before the end of 1995.
In connection with the Merger and during the fourth quarter 1995, Ceridian
expects to refinance Comdata's outstanding indebtedness, consisting
principally of 12.5% Senior Notes and 13.25% Senior Subordinated
Debentures aggregating approximately $205 million. Charges that Ceridian
expects to record in the fourth quarter 1995 to cover such refinancing
and other Merger-related costs and expenses are expected to be
approximately $65 million.
Item 7. Financial Statements and Exhibits.
c. Exhibits. Attached hereto.
99.1 Press Release, dated August 24, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CERIDIAN CORPORATION
Date: August 24, 1995
By: /s/Loren D. Groxx
Loren D. Gross
Vice President and
Corporate Controller
(Principal Accounting Officer)
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EXHIBIT INDEX
Exhibit Description Code
99.1 Ceridian Corporation Press Release E
Dated August 24, 1995
Legend: E Electronic Filing
IBR Incorporated by Reference
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EXHIBIT 99.1
News Release CERIDIAN CORPORATION
Nancy Foltz
Ceridian
612/853-5229
CERIDIAN TO ACQUIRE COMDATA HOLDINGS IN
$900 MILLION STOCK TRANSACTION
Acquisition Will Make Ceridian a $1.3 Billion Information Services Provider
Transaction Expected to Be Accretive to Ceridian's EPS
MINNEAPOLIS, MN./BRENTWOOD, TN., August 24, 1995 -- Ceridian Corporation
(NYSE: CEN) and Comdata Holdings Corporation (NASDAQ: CMDT) jointly
announced today that Ceridian has reached a definitive agreement to acquire
Comdata, a leading provider of transaction processing and information
services to the transportation and gaming industries. The Board of
Directors of both companies have unanimously approved the acquisition.
The combination creates a company that will have $1.3 billion of annual
revenue, primarily from information services. The transaction is expected
to be accretive to Ceridian's earnings per share in 1996, and to provide an
increasingly positive contribution to earnings thereafter. Under the terms
of the agreement, Comdata's common shareholders will receive 0.57 shares of
Ceridian common shares for each share of Comdata -- and Comdata preferred
shareholders will receive equivalent consideration -- for a total equity
consideration of approximately $900 million.
Lawrence Perlman, chairman and chief executive officer of Ceridian, said:
"The Comdata acquisition is a major step forward in Ceridian's strategy of
aggressively growing its information services business. Comdata has a
strong position in two large and growing markets. In Comdata, we are
adding a third leg to Ceridian's information services segment that has many
important characteristics in common with Ceridian's current businesses.
These include value-added services to customers, leadership in growing
markets, a commitment to revenue growth along with a high level of
recurring revenues, predictable earnings and cash flow, and strong customer
relationships.
(more)
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"Comdata is a profitable, growing company, and the transaction will allow
Ceridian to accelerate utilization of its net operating loss carryforwards.
In addition, because of the strength of Ceridian's balance sheet, we will
be able to reduce the cost of Comdata's debt significantly."
George L. McTavish, chairman and chief executive officer of Comdata, said:
"This transaction will greatly enhance Comdata's operating and financial
flexibility, which we believe will translate into increased growth. We
think the operational model we have implemented so successfully in
transportation and gaming can be replicated in other large vertical
markets. We also think there are substantial opportunities for leveraging
technology, cross-selling and other forms of cooperation with Ceridian's
businesses. With the financial strength of Ceridian behind us, we are well
positioned to pursue Comdata's growth opportunities aggressively."
Under the terms of the agreement, Comdata will retain its name and operate
as an independent unit of Ceridian Corporation. Its management team and
1,850 employees will remain with the company, and McTavish will report to
Perlman. Ceridian expects certain one-time charges related to the
refinancing of Comdata's outstanding indebtedness and costs related to the
acquisition to be incurred in the quarter that the transaction closes.
The transaction is expected to be tax-free to Comdata's shareholders and to
be accounted for on a pooling-of-interests basis. Completion of the
transaction is expected to occur before the end of 1995 and is subject to a
number of conditions, including the approval of the shareholders of each
company, no changes in reported ownership of Ceridian stock that would
affect the continuing availability of its net operating loss carryforwards,
and certain regulatory matters, including completion of the Hart-Scott-
Rodino process. Details of the proposed transaction will be contained in a
proxy statement to be filed shortly with the Securities and Exchange
Commission.
Welsh, Carson, Anderson & Stowe and Charterhouse, Inc., the holders of the
majority of the outstanding shares of Comdata's convertible preferred
stock, have separately agreed to vote in favor of the transaction.
The Comdata acquisition will mark the eleventh acquisition since Ceridian
was created in conjunction with the spin off of Control Data Systems, Inc.
in 1992. Upon completion of the transaction, Ceridian's market
capitalization is expected to have grown to over $3 billion from
approximately $300 million in September 1991, just before Control Data
Corporation undertook its reshaping plan.
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Comdata is a leading provider of funds transfer, fuel purchase, cash
advance and permit services, as well as fleet optimization and routing
software, for the transportation industry; point-of-sale and data
collection services for the truck stop industry; and cash advance services
for the gaming industry. The company, which was founded in 1969 and
acquired in 1987 by a group of investors in a leveraged transaction, has
been growing substantially in recent years. Revenue for the Brentwood,
Tenn., based company is expected to total approximately $300 million in
1995.
Ceridian, with estimated 1995 revenue of $1.0 billion, is a leading
information services and defense electronics company. Its largest
businesses are Ceridian Employer Services, the Arbitron Company and
Computing Devices International.
Bear Stearns & Co. is acting as financial advisor to Ceridian. Comdata is
being advised by Lazard Freres & Co.
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Fact Sheet
Comdata Holdings Corporation
Description Comdata Holdings Corporation (NASDAQ: CMDT) is a leading
provider of transaction processing and information services
to the transportation and gaming industries.
Products The highly competitive transportation industry needs
information services to improve productivity and customer
service, and to lower its costs. Comdata supplies services
that enable truck drivers to obtain funds for purchases at
truck stops and to purchase fuel with an ID card; driver
services that include cash advances, direct deposit, ATMs and
safety training; permits and regulatory compliance services;
backhaul information and logistics services for fleet
optimization; routing software; and telephone and
telecommunications services for trucking companies.
For the fast-growing gaming industry, Comdata provides
players with a full range of cash advance services, including
credit card cash advances, ATMs, debit card processing, check
authorization and acceptance services, and wire services.
Customers Over 16,000 trucking companies, 8,000 truck stops and 900
gaming locations.
Earnings and Comdata reported earnings of $28.1 million in 1994 on
Revenue revenue of $243 million. Approximately 60 percent of the
revenue came from transportation services, with the balance
coming from gaming-related services.
Employees andComdata has 1,850 employees, most of whom work at its
Locations headquarters in Brentwood, Tenn., (near Nashville) and its
Transceiver division (regulatory compliance services, permits
and safety services) in Dallas.
Year of Origin The company was founded in 1969 as Comdata Network, Inc. It
became Comdata Holdings Corporation in 1987 when it was
acquired by a group of investors in a leveraged
recapitalization.
