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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
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FORM 8-K
CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
September 25, 1997 (September 20, 1997)
Commission file number 0-24787
AFFILIATED COMPUTER SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0310342
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization)
2828 NORTH HASKELL
DALLAS, TEXAS 75204
(Address of principal executive offices)
(Zip Code)
214-841-6111
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On September 20, 1997, Affiliated Computer Services, Inc. ("ACS") and
Computer Data Systems, Inc. ("CDSI") signed a definitive agreement (the
"Agreement") pursuant to which CDSI will be acquired by and merged into ACS.
Under the terms of the Agreement, stockholders of CDSI will receive 1.759
shares of ACS Class A common stock for each share of CDSI common stock. The
closing price of ACS Class A common stock on September 19, 1997, the last
trading day prior to the public announcement of the transaction, was $29.375
per share. In addition, approximately $48 million of CDSI debt will be repaid
for a total transaction value of approximately $373 million.
The transaction is structured to be tax free to CDSI stockholders and
accounted for as a pooling of interest. The merger is subject to regulatory
approvals and certain other conditions, including approval of the merger by a
two-thirds vote of CDSI's stockholders and approval of the issuance of
additional shares of ACS Class A common stock by ACS' stockholders. With
respect to the stockholder votes, all the directors and certain executive
officers of both companies have agreed to vote their stock in favor of the
transaction. In the case of ACS, such directors and officers have sufficient
voting power to satisfy the stockholder vote condition in the Agreement. The
directors and officers of CDSI hold stock representing approximately ten
percent of the outstanding shares.
Meetings of the stockholders of ACS and CDSI will be scheduled within the
next 90 days and closing of the merger is expected during the fourth quarter of
calendar 1997.
The foregoing is qualified in its entirety by reference to the Press
Release, a copy of which is filed as an exhibit to this Current Report on Form
8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Exhibits.
*99.1 Press Release, dated September 21, 1997, issued by
Affiliated Computer Services, Inc.
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* Filed herewith
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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 hereunto duly authorized.
Affiliated Computer Services, Inc.
Date: September 25, 1997
By: /s/ Mark A. King
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Mark A. King
Executive Vice President
and Chief Financial Officer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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*99.1 Press Release, dated September 21, 1997, issued by
Affiliated Computer Services, Inc.
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* Filed herewith
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
MEDIA CONTACT: ANALYSTS CONTACT:
Mark A. King
Corporate Communications Executive Vice President
Affiliated Computer Services, Inc. and Chief Financial Officer
(214) 841-8011 (214) 841-8007
AFFILIATED COMPUTER SERVICES, INC.
TO ACQUIRE
COMPUTER DATA SYSTEMS, INC.
DALLAS, TEXAS - September 21, 1997 -- Affiliated Computer Services, Inc. (NYSE:
AFA) and Computer Data Systems, Inc. (NASDAQ: CDSI) announced today they have
signed a definitive agreement under which CDSI will be acquired by and merged
into Affiliated Computer Services, Inc. ("ACS"). Under the terms of the
agreement, shareholders of CDSI will receive 1.759 shares of ACS for each share
of CDSI. Based on ACS' closing price of $29.375 on September 19, CDSI
shareholders would receive approximately 11.0 million shares of ACS stock. In
addition, approximately $48 million of debt will be repaid for a total
transaction value of approximately $373 million. The transaction is structured
to be tax-free to CDSI shareholders and will be accounted for as a pooling of
interests. The merger agreement is subject to certain regulatory approvals and
certain other conditions, including approval of the merger by the shareholders
of CDSI and approval of the issuance of the ACS stock by the ACS shareholders.
It is currently intended that special meetings of the shareholders of each of
ACS and CDSI will be held within the next 90 days. Closing of the merger is
expected during the fourth quarter of calendar 1997.
With respect to the shareholder votes, all of the directors and executive
officers of each of ACS and CDSI have agreed to vote their stock in favor of
the transaction. In the case of ACS, such directors and officers have
sufficient voting power to satisfy the shareholder vote condition under the
definitive agreement. In the case of CDSI, where a two- third's vote is
required, the directors and the officers hold stock representing approximately
ten percent of the outstanding shares.
CDSI, headquartered in Rockville, Maryland, is a recognized leader in providing
information technology solutions including systems integration, software
engineering/reengineering, development and maintenance, database support, data
center management and processing services and telecommunications engineering.
CDSI provides customers with innovative applications for enhancing their
business processes - enabling customers to realize cost efficiencies, provide
better service and introduce new capabilities. CDSI's 3,900 employees serve a
wide array of government and private industry customers with information
technology expertise, systems, and products. At closing, CDSI will become a
wholly-owned subsidiary of ACS.
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AFFILIATED COMPUTER SERVICES, INC. TO ACQUIRE
COMPUTER DATA SYSTEMS, INC. PAGE 2
"We are extremely pleased to be making this announcement with CDSI, and are
very enthusiastic about the potential this strategic combination will offer our
customers, shareholders and employees," said Darwin Deason, chairman and chief
executive officer of ACS. "Our two companies are highly complementary both in
terms of the markets we serve and the products and services we offer. The
acquisition of CDSI provides ACS a pool of technical and management talent and
will expand our traditional service offerings to include systems analysis and
design, applications development, network engineering, system integration and a
significant suite of business process outsourcing services. ACS welcomes the
CDSI team. Our combined organization will generate over $1.1 billion in
revenues on an annualized basis. Most importantly, we expect that this
acquisition will be non-dilutive to ACS shareholders on a prospective basis."
"This merger will result in a company that is extremely well-positioned, both
strategically and financially, to meet the challenge of a rapidly changing
technology environment," stated Clifford Kendall, chairman of the board of
CDSI. "By joining with ACS we gain critical mass to capitalize on the
significant opportunities that exist in CDSI's traditional government market,
but even more exciting is the opportunity to bring CDSI's traditional products
and services to a greatly expanded commercial market sector." Mr. Kendall and
Peter Bracken, CDSI's president and chief executive officer, will join ACS'
board of directors following the merger.
Statements about the company's outlook and all other statements in this release
other than historical facts are forward- looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These forward looking
statements rely on a number of assumptions concerning future events and are
subject to a number of uncertainties and other factors, many of which are
outside ACS' control, that could cause actual results to differ materially from
such statements. While the company believes that the assumptions concerning
future events are reasonable, it cautions that there are inherent difficulties
in predicting certain important factors, especially the timing and magnitude of
technological advances; the performance of recently acquired businesses; the
prospects for future acquisitions; the possibility that a current customer
could be acquired or otherwise affected by a future event that would diminish
their information technology requirements; the competition in the information
technology industry and the impact of such competition on pricing, revenues and
margins; the degree to which business entities continue to outsource
information technology and business processes; uncertainties surrounding budget
reductions or changes in funding priorities or existing government programs and
the cost of attracting and retaining highly skilled personnel. These factors,
when applicable, are discussed in the company's filings with the Securities and
Exchange Commission, including the most recent Form 10-K, a copy of which may
be obtained through the company without charge. ACS disclaims any intention or
obligation to revise any forward-looking statements whether as a result of new
information, future event, or otherwise.
Affiliated Computer Services, Inc., based in Dallas, Texas, and with offices
throughout the United States, and in Europe and Mexico, provides information
technology services and electronic funds transfer processing. ACS provides a
full range of information technology services including business process
outsourcing, data processing outsourcing, image management solutions and
information systems programming services. The company's Class A common stock
trades on the New York Stock Exchange under the symbol "AFA".
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