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: May 24, 1999
MARKETING SERVICES GROUP, INC.
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(Exact name of Registrant as specified in charter)
Nevada 0-16730 88-0085608
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(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
333 Seventh Avenue
New York, New York 10001
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(Address of Principal Executive Offices)
212/594-7688
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets
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On May 13, 1999, Marketing Services Group, Inc. ("MSGI") completed an
acquisition agreement with CMGI, Inc. (the "Seller") to acquire all of the
outstanding capital stock (the "Shares") of its wholly-owned subsidiary, CMG
Direct Corporation, including its business unit known as PermissionPlus. In
consideration of the purchase of the Shares and other transactions in the
Agreement, the Seller received the aggregate sum of $14,000,000 in cash subject
to certain purchase price adjustments and $12,000,000 in stock for an aggregate
of 2,321,084 restricted shares of common stock of MSGI, par value $.01 per share
at an agreed upon price of $5.17 per share. The price per share was calculated
based on an average closing price for 45 days prior to and including
March 9, 1999, the date the Agreement was entered into.
CMG Direct provides database services to the direct marketing and internet
industries. PermissionPlus, a Web application, enables companies to automate Web
site customer acquisition and increase customer lifetime value. It combines the
power of market research, database management, e-mail service bureau, campaign
management tool, Web site navigation system and a real-time response tracking
and analysis system into one integrated internet application.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Financial statements of businesses acquired *
(b) Pro forma financial information *
(c) Exhibits included herein:
20.2 Press Release dated May 14, 1999
(d) Items previously filed March 24, 1999:
2.1 Stock purchase agreement between Marketing Services Group, Inc.
and CMGI, Inc.
20.1 Press Release dated March 10, 1999
* It is impracticable for MSGI to provide the required financial statements and
pro forma financial information as of the date hereof. MSGI will file the
required financial statements and pro forma financial information no later than
60 days after the date hereof.
<PAGE>
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.
MARKETING SERVICES GROUP, INC.
Date: May 24, 1999 By: /s/ Cindy H. Hill
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Title: Chief Financial Officer
Exhibit 20.2
Contact:
Jamie Shaber
Marketing Service Group, Inc.
212-594-7688
Morgen-Walke Associates
Andrea Kaimowitz/ Cheryl Olson
Press: Eileen King
212-850-5600
For Immediate Release
MSGI COMPLETES CMG Direct ACQUISITION
Short-Term Financing To Be Provided By GE Equity
New York - May 13, 1999 - Marketing Services Group, Inc. (Nasdaq: MSGI), an
integrated marketing and Internet services industry leader, today announced it
has successfully completed the acquisition of CMG Direct Corporation, the
original CMGI direct marketing business. In conjunction with the acquisition,
CMGI will become a significant minority shareholder, representing over 10
percent of the outstanding shares of MSGI, post transaction. Current investor,
GE Equity, has agreed in principal to provide $10 million of short-term debt
financing to support the acquisition.
MSGI plans to expand its Internet marketing services by leveraging CMG Direct's
traditional database marketing unit, as well as their latest Internet
incubation, PermissionPlusTM, an automated Internet Marketing solution.
PermissionPlusTM enables companies to automate the Web site customer acquisition
function and to increase the lifetime value of its customers.
"The CMG Direct acquisition represents the first of our new corporate
initiatives to pursue strategic opportunities in the Internet," commented Jeremy
Barbera, Chairman and CEO of Marketing Services Group, Inc. "This acquisition
has reshaped MSGI as a premier player in the Internet space and supports our
strategy of investing, acquiring and incubating online businesses."
"GE Equity has been extraordinarily supportive of the CMG transaction, as well
as our expanded Internet strategy. They looked at MSGI's financing opportunities
for closing this transaction and gained approval to provide us with the
financing for $10 million. We are very excited to have the backing and support
of GE Equity as we expand our enterprise with CMGI as our latest strategic
partner" added Jeremy Barbera.
David Wetherell, Chairman and Chief Executive Officer of CMGI, stated, " I look
forward to working with MSGI to assist them in building upon their business
model. I'm confident that, under the direction of Ed Mullen as their President,
MSGI is well positioned to move forward with a solid Internet marketing
strategy. We look forward to their success."
About MSGI
Marketing Services Group, Inc. is a leader in the Internet and marketing
services industries. MSGI's revenues have grown from $16 million in fiscal 1996
to in excess of $100 million on an annualized basis. GE Equity is the owner of a
22 percent stockholder position in MSGI. MSGI is organized into two business
divisions: the Internet Group and the Marketing Services Group. The Internet
Group's mission is to acquire, invest in and incubate Internet companies. Its
preliminary focus will be on PermissionPlusTM and will expand into other
strategic areas. The MSGI Internet Group provides Internet marketing, e-commerce
applications, Web development and hosting, online ad sales and consulting. Its
Marketing Services Group provides strategic planning, direct marketing and
database marketing, telemarketing and telefundraising, media planning and buying
and fulfillment. Through this business segment, MSGI will continue to grow by
leveraging the synergies it has across all its companies in marketing,
technology, and capabilities. Thousands of clients worldwide are provided
services by MSGI with offices throughout the United States and in London.
Corporate headquarters are located at 333 Seventh Ave., New York, NY 10001.
Telephone: 212-594-7688. Additional information is available on the Company's
Website: http://www.msginet.com.
About CMGI
A recognized leader in the Internet economy, CMGI (Nasdaq: CMGI) has built a
substantial base of Internet operating companies and, through its @Ventures
affiliate, has invested in a growing series of synergistic Internet enterprises
which enhance the value of its core holdings. This unique method of generating
equity for its shareholders is what CMGI calls "creating net value." Microsoft,
Intel and Sumitomo hold minority positions in CMGI.
CMGI's majority-owned subsidiaries include Activerse, Adsmart, Engage, ICast,
Magnitude Network, NaviSite, NaviNet, Planet Direct and ZineZone. The Company's
@Ventures affiliates have ownership interests in Lycos, Inc. (Nasdaq: LCOS),
GeoCities (Nasdaq: GCTY), Critical Path (Nasdaq: CPTH), Silknet (Nasdaq: SILK),
Ancestry.com, Asimba, blaxxun, CarParts.com, Chemdex, eCircles.com,
Furniture.com, HotLinks, KOZ.com, Medical Village, MotherNature.com,
NextMonet.com, OneCore Financial Network, Raging Bull, Softway Systems, Speech
Machines, ThingWorld.com, TicketsLive, Universal Learning Technology, Vicinity,
Virtual Ink and Visto.
CMGI is also the majority-owner of SalesLink, InSolutions and On-Demand
Solutions, leaders in the direct marketing, fulfillment and turnkey arenas. CMGI
Corporate headquarters is located at 100 Brickstone Square, Andover, MA 01810.
Telephone: 978-684-3600. Fax: 978-684-3814. Additional information is available
on the company's Web site http://www.cmgi.com.
About GE Equity
GE Equity, a subsidiary of GE Capital, is the private equity arm of GE, and has
over 20 diversified investments in Internet and e-commerce companies. These
include: iXL, CFN, Realtor.com, ValueVision International, StarMedia, Launch
Media and others. GE Capital, with assets of more than US$300 billion, is a
global, diversified financial services company with 28 specialized businesses. A
wholly-owned subsidiary of General Electric Company, GE Capital, based in
Stamford, CT, provides equipment management, mid-market and specialized
financing, specialty insurance and a variety of consumer services, such as car
leasing, home mortgages and credit cards, to businesses and individuals around
the world. GE is a diversified manufacturing, technology and services company
with operations worldwide.
Matters discussed in this release include forward-looking statements that
involve risks and uncertainties, and actual results may be materially different.
Factors that could cause actual results to differ are stated in the company's
reports to the Securities and Exchange Commission including its 10-Q for the
period ended December 31, 1998 and the annual report on Form 10-KSB for the year
ended June 30, 1998.
