SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 - October 11, 1996
(Date of earliest event reported)
MEDIQ INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 1-8147 51-0219413
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
One MEDIQ Plaza, Pennsauken, New Jersey 08110
(Address of principal executive offices, zip code)
Area Code (609) 665-9300
(Telephone number)
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Item 2. Disposition of Assets
On October 11, 1996, the previously announced acquisition of PCI Services,
Inc. ("PCI") by Cardinal Health, Inc. ("Cardinal") was completed pursuant to the
terms of an Agreement and Plan of Merger, dated as of July 23, 1996 among
Cardinal, PCI, MEDIQ Incorporated ("MEDIQ") and a wholly-owned subsidiary of
Cardinal. In the transaction, which was structured as a merger of PCI with a
wholly-owned subsidiary of Cardinal, the 2,875,000 shares of common stock owned
by MEDIQ were converted into the right to receive 966,000 shares of common stock
of Cardinal, using an exchange ratio of .336 Cardinal shares for each PCI share.
The shares of Cardinal common stock acquired by MEDIQ in the transaction
may, subject to certain restrictions, be sold by MEDIQ any time after Cardinal
shall have publicly released the combined financial results (including combined
sales and net income) of Cardinal and PCI including at least 30 days of combined
operations of Cardinal and PCI following the consummation of the transaction.
Based on the closing price for shares of Cardinal common stock on
October 11, 1996, the Cardinal shares acquired by MEDIQ had a market value of
approximately $79.2 million. On this basis, MEDIQ would anticipate realizing, in
the first quarter of fiscal 1997, an after tax gain of approximately $31.8
million on the divestiture of the PCI shares, or approximately $1.28 per share
of MEDIQ common stock.
The foregoing summary is qualified in its entirety by reference to the copy
of the Merger Agreement and related agreements included as exhibits to this Form
8-K and incorporated herein in their entirety by reference.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The Registrant restated its financial statements as of June 30, 1996 to
reflect its equity investment in PCI Services, Inc. as a discontinued operation.
Accordingly, pro forma financial information is not required pursuant to Article
11 of Regulation S-X.
(c) Exhibits.
Exhibit 1 - Agreement and Plan of Merger dated as of July 23, 1996 by and
among Cardinal Health Inc., Panther Merger Corp., PCI Services, Inc., and MEDIQ
Incorporated is
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(c) Exhibits (continued)
incorporated herein by reference to Exhibit 2.1 to the Schedule 13D filed by
Cardinal Health, Inc. with respect to the securities of PCI Services, Inc. on
July 29, 1996.
Exhibit 2 - Support/Voting Agreement dated as of July 23, 1996, by and
among Cardinal Health Inc., MEDIQ Incorporated and MEDIQ Investment Services,
Inc. is incorporated herein by reference to Exhibit 99.1 to the Schedule 13D
filed by Cardinal Health, Inc. with respect to the securities of PCI Services,
Inc. on July 29, 1996.
Exhibit 3 - Stock Option Agreement dated as of July 23, 1996, by and among
Cardinal Health Inc., MEDIQ Incorporated and MEDIQ Investment Services, Inc. is
incorporated herein by reference to Exhibit 2.2 to the Schedule 13D filed by
Cardinal Health, Inc. with respect to the securities of PCI Services, Inc. on
July 29, 1996.
Exhibit 4 - Affiliate Letter between Cardinal Health, Inc. and MEDIQ
Incorporated dated as of August 16, 1996.
Exhibit 99 - Press Release dated October 11, 1996.
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MEDIQ INCORPORATED AND SUBSIDIARIES
SIGNATURE
---------
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.
MEDIQ Incorporated
------------------
(Registrant)
October 17, 1996
- ----------------
(Date)
/s/ Michael F. Sandler
----------------------
Michael F. Sandler
Senior Vice President -- Finance
and Chief Financial Officer
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EXHIBIT 4
August 16, 1996
Cardinal Health, Inc.
5555 Glendon Court
Dublin, Ohio 43016
Gentlemen:
The undersigned acknowledges that the undersigned may be deemed to be an
"affiliate" of PCI Services, Inc., a Delaware corporation ("PCI"), as the term
"affiliate" is used in and for purposes of Accounting Series Releases 130 and
135, as amended, and Staff Accounting Bulletins 65 and 76 of the Securities and
Exchange Commission (the "Commission") and paragraphs (c) and (d) of Rule 145
("Rule 145") promulgated by the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). Pursuant to the terms of the Agreement and Plan
of Merger dated as of July 23, 1996 (the "Agreement"), among PCI, Cardinal
Health, Inc., an Ohio corporation ("Cardinal"), MEDIQ Incorporated, a Delaware
corporation, and Panther Merger Corp., a Delaware corporation and a wholly owned
subsidiary of Cardinal ("Subcorp"), Subcorp will be merged with and into PCI
(the "Merger"), all of the outstanding shares of capital stock of PCI will be
converted into Common Shares, without par value, of Cardinal ("Cardinal Common
Shares"), and all unexpired and unexercised options to purchase capital stock of
PCI ("PCI Options") will become options to purchase Cardinal Common Shares
("Cardinal Options"). In, or as a result of, the Merger, the undersigned will
(i) receive Cardinal Common Shares in exchange for all of the shares of capital
stock of PCI ("PCI Stock") owned by the undersigned immediately prior to the
time of the effectiveness of the Merger (the "Effective Time"), and/or
(ii) receive Cardinal Options.
The undersigned hereby acknowledges and agrees with Cardinal that, within
the 30 days prior to the Effective Time, the undersigned will not sell, transfer
or otherwise dispose of, or direct or cause the sale, transfer or other
disposition of, any shares of PCI Stock or Cardinal Common Shares or PCI Options
beneficially owned by the undersigned, whether owned on the date hereof or
hereafter acquired. The undersigned further acknowledges and agrees with
Cardinal that the undersigned will not sell, transfer or otherwise dispose of,
or direct or cause the sale,
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Cardinal Health, Inc.
August 16, 1996
Page 2
transfer or other disposition of, any Cardinal Common Shares or Cardinal Options
(or shares issuable upon exercise thereof) beneficially owned by the undersigned
as a result of the Merger or otherwise until after such time as Cardinal shall
have publicly released a report in the form of a quarterly earnings report,
registration statement filed with the Commission, a report filed with the
Commission on Form 10-K, 10-Q or 8-K or any other public filing, statement or
announcement which includes the combined financial results (including combined
sales and net income) of Cardinal and PCI for a period of at least 30 days of
combined operations of Cardinal and PCI following the Effective Time.
The undersigned acknowledges that if the undersigned is an affiliate under
the Securities Act, the undersigned's ability to sell, assign or transfer
Cardinal Common Shares and Cardinal Options beneficially owned by the
undersigned as a result of the Merger may be restricted unless such transaction
is registered under the Securities Act or an exemption from such registration is
available. The undersigned understands that such exemptions are limited and the
undersigned has obtained advice of counsel as to the nature and conditions of
such exemptions, including information with respect to the applicability to the
sale, assignment or transfer of such securities of Rule 144 and 145(d)
promulgated under the Securities Act.
The undersigned further acknowledges and agrees with Cardinal that the
undersigned will not offer to sell, sell, transfer or otherwise dispose of any
of the Cardinal Common Shares or Cardinal Options (or shares issuable upon
exercise thereof) beneficially owned by the undersigned as a result of the
Merger except (a) in compliance with the applicable provisions of Rule 145 or
(b) pursuant to a registration statement under the Securities Act or (c) in a
transaction which, in the opinion of independent counsel reasonably satisfactory
to Cardinal or as described in a "no-action" or interpretive letter from the
Staff of the Commission, is not required to be registered under the Securities
Act; provided, however, that, for so long as the undersigned holds any Cardinal
Common Shares as to which the undersigned is subject to the limitations of Rule
145, Cardinal will use its reasonable efforts to file all reports required to be
filed by it pursuant to the Securities Exchange Act of 1934, as amended, and the
Rules and Regulations thereunder, as the same shall be in effect at the time, so
as to satisfy the requirements of paragraph (c) of Rule 144 under the Securities
Act that there be available current public information with respect to Cardinal,
and to that extent to make
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Cardinal Health, Inc.
August 16, 1996
Page 3
available to the undersigned the exemption afforded by Rule 145 with respect to
the sale, transfer or other disposition of the Cardinal Common Shares.
In the event of a sale or other disposition by the undersigned of Cardinal
Common Shares or Cardinal Options pursuant to Rule 145, the undersigned will
supply Cardinal with evidence of compliance with such Rule, in the form of a
letter in the form of Annex I hereto. The undersigned understands that Cardinal
may instruct its transfer agent to withhold the transfer of any Cardinal Common
Shares or Cardinal Options disposed of by the undersigned, but that upon receipt
of such evidence of compliance the transfer agent shall effectuate the transfer
of Cardinal Common Shares or Cardinal Options sold as indicated in the letter.
The undersigned acknowledges and agrees that appropriate legends will be
placed on certificates representing Cardinal Common Shares received by the
undersigned in the Merger or held by a transferee thereof or upon exercise of a
Cardinal Option, which legends will be removed by delivery of substitute
certificates upon receipt of an opinion in form and substance reasonably
satisfactory to Cardinal from independent counsel reasonably satisfactory to
Cardinal to the effect that such legends are no longer required for purposes of
the Securities Act. Notwithstanding the foregoing, any such legends will be
removed by delivery of substitute certificates upon written request of the
undersigned if at the time of making such request the undersigned would
otherwise be permitted to dispose of the Cardinal Common Shares represented by
such certificates pursuant to Rule 145(d)(2).
The undersigned acknowledges that (i) the undersigned has carefully read
this letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of Cardinal Common
Shares, PCI Stock, PCI Options and Cardinal Options and (ii) the receipt by
Cardinal of this letter agreement is an inducement and a condition to
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Cardinal Health, Inc.
August 16, 1996
Page 4
Cardinal's obligations to consummate the Merger. This letter agreement shall
expire and be of no force or effect upon termination of the Agreement prior to
the Effective Time.
Very truly yours,
MEDIQ INCORPORATED
/s/ Michael Sandler
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Michael F. Sandler
Senior Vice President - Finance
and Chief Financial Officer
Accepted and agreed this
27th day of August, 1996
CARDINAL HEALTH, INC.
By: /s/ George H. Bennett, Jr.
-----------------------------------
Name: George H. Bennett, Jr.
Title: Executive Vice President
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ANNEX I
____________ ___, 199__
Cardinal Health, Inc.
5555 Glendon Court
Dublin, Ohio 43016
Attention: Corporate Secretary
On ____________ ___, 199__, the undersigned sold the securities
("Securities") of Cardinal Health, Inc. ("Cardinal") described below in the
space provided for that purpose (the "Securities"). The Securities were acquired
by the undersigned in connection with the merger of Panther Merger Corp. with
and into PCI Services, Inc.
Based upon the most recent report or statement filed by Cardinal with the
Securities and Exchange Commission, the Securities sold by the undersigned were
within the prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the "Act").
The undersigned hereby represents to Cardinal that the Securities were sold
in "brokers' transactions" within the meaning of Section 4(4) of the Act or in
transactions directly with a "market maker" as that term is defined in Section
3(a)(38) of the Securities Exchange Act of 1934, as amended. The undersigned
further represents to Cardinal that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale of the
Securities to any person other than to the broker who executed the order in
respect of such sale.
Very truly yours,
Description of Securities sold:
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EXHIBIT 99
Exhibit 99
NEWS RELEASE
Date: IMMEDIATE (October 14, 1996)
Contact: Thomas E. Carroll, Chief Executive Officer
MEDIQ Incorporated
(609) 662-3200
PENNSAUKEN, NJ - MEDIQ Incorporated (AMEX:MED) reported today that PCI
Services, Inc., a company in which MEDIQ had owned a substantial interest,
completed a merger with Cardinal Health, Inc. on October 11, 1996.
MEDIQ received 966,000 shares of Cardinal Health, Inc. stock which, based
on Friday's closing price for Cardinal Health, Inc., has a market value of
$79.2 million. As a result, MEDIQ will realize an after-tax gain of
approximately $31.8 million, or approximately $1.28 per share of MEDIQ
common stock.
MEDIQ Incorporated, whose shares (MED and MED.Pr) and debentures (MED.C and
MED.NP) are traded on the American Stock Exchange, through its wholly-owned
subsidiary, MEDIQ/PRN Life Support Services, Inc., is the largest movable
critical care and life support medical equipment rental business in the United
States.
