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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
November 1, 2000 (Date of earliest event reported)
SAGA SYSTEMS, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 1-13609 54-1167173
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
SAGA SYSTEMS, Inc.
11190 Sunrise Valley Drive
Reston, Virginia 20191
(Address of principal executive offices)
(703) 860-5050
(Registrant's telephone number, including area code)
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Item 5. Other Events
On November 2, 2000, SAGA SYSTEMS, Inc. ("SAGA SYSTEMS"), together with
Software AG ("Software AG"), issued a joint press release announcing that
Software AG, Software AG Acquisition Corporation, a Delaware corporation and
wholly owned subsidiary of Software AG ("Acquisition Corp."), and SAGA SYSTEMS
had entered into an Agreement and Plan of Merger, dated as of November 1, 2000
(the "Merger Agreement"), providing for the merger of Acquisition Corp. with and
into SAGA SYSTEMS (the "Merger"). Under the terms of the Merger Agreement, if
the Merger is consummated, SAGA SYSTEMS stockholders (other than Software AG and
stockholders who elect to exercise appraisal rights under Delaware law) will
receive $11.50 in cash for each share of SAGA SYSTEMS common stock held. The
Merger is subject to customary closing conditions, including the approval of the
Merger by the stockholders of SAGA SYSTEMS.
In connection with the execution of the Merger Agreement, Thayer Equity
Investors III, L.P. and its affiliate, TC Co-Investors, LLC (the "Thayer
Stockholders"), which collectively own approximately 37% of the outstanding
SAGA SYSTEMS common stock, have agreed to sell to Acquisition Corp. immediately
prior to the consummation of the Merger approximately 65% of the shares held by
them in exchange for a 12-month subordinated promissory note of Software AG in
the aggregate principal amount of approximately $80.5 million. The principal
amount of the note was calculated on the basis of the per share purchase price
of $11.50 for each share of SAGA SYSTEMS common stock, and the SAGA SYSTEMS
Board of Directors appointed a special committee, consisting of three
independent directors, to review the terms of the note to ensure that such terms
did not result in the Thayer Stockholders' receiving more favorable
consideration than the other SAGA SYSTEMS' stockholders. The note will not bear
interest during the first three month period beginning on the date of issuance.
During the immediately subsequent three month period, it will bear interest at
the rate of 4% per annum, and thereafter, until the principal amount has been
paid in full (and so long as the note is not in default), at 8% per annum. With
respect to the remaining SAGA SYSTEMS shares held by the Thayer Stockholders and
not sold to Acquisition Corp. immediately prior to consummation of the Merger,
the Thayer Stockholders will receive under the Merger Agreement the same $11.50
per share consideration received by other stockholders.
In addition, the Thayer Stockholders and Daniel F. Gillis, President
and Chief Executive Officer of SAGA SYSTEMS (who owns less than 1% of the
outstanding shares of SAGA SYSTEMS common stock), have agreed, among other
things, to vote their shares of SAGA SYSTEMS common stock to approve the Merger
Agreement, the Merger and related agreements. Their respective obligations to
vote in this manner will terminate upon termination of the Merger Agreement.
The foregoing description is qualified in its entirety by reference to
the complete text of the Merger Agreement, a copy of which is filed as Exhibit
2.1 to this current report on Form 8-K and is incorporated by reference herein
in its entirety. A copy of the news release, dated November 2, 2000 (the "News
Release"), relating to the Merger is filed as Exhibit 99.1 to this current
report on Form 8-K and is incorporated herein by reference.
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The News Release contains, among other things, forward-looking
statements regarding SAGA SYSTEMS and Software AG, including statements relating
to expected revenues, costs, accretion to earnings and market penetration. Such
forward-looking statements are not guarantees of future performance and involve
risks and uncertainties, and actual results may differ materially from those
contemplated by such forward-looking statements. These risks, contingencies and
uncertainties include, but are not limited to, actions of the U.S., foreign and
local governments; the inability to successfully integrate the businesses of
Software AG and SAGA SYSTEMS; costs related to the Merger; fluctuations in
currency values; significant quarterly and other fluctuations in revenues and
results of operations; reliance on the timely and successful development,
production, marketing and delivery of new products and services; risks
associated with conducting a professional services business; reliance on the
mainframe computing environment and demand for the SAGA SYSTEMS products;
changes in the SAGA SYSTEMS product and service mix and product and service
pricing; interoperability of the SAGA SYSTEMS products with leading software
application products; risks of protecting intellectual property rights and
litigation; dependence on third-party technology; risks associated with
international sales, distributors and operations; dependence on government
contracts; SAGA SYSTEMS' ability to adjust to enhanced competition and new
competitors in the software and professional services markets, to maintain and
enhance its relationships with vendors and to attract and retain key employees;
conditions in the information technology and enterprise systems and integration
markets; general economic and business conditions; and other risks detailed from
time to time in SAGA SYSTEMS' reports filed with the Securities Exchange
Commission pursuant to the Securities Exchange Act of 1934 or the Securities Act
of 1933.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit Number Exhibit Description
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2.1 Agreement and Plan of Merger, dated as of
November 1, 2000, among SAGA SYSTEMS,
Acquisition Corp. and Software AG.
99.1 Text of News Release Relating to the Merger
dated November 2, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, SAGA
SYSTEMS has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SAGA SYSTEMS, INC.
(Registrant)
/s/ Dale Williams
Date: November 3, 2000 By: ______________________________
Dale Williams
Name:_________________________
Vice President and Chief
Title:________________________
Financial Officer
________________________
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EXHIBIT INDEX
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Exhibit Number Exhibit Description
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2.1 Agreement and Plan of Merger, dated as of
November 1, 2000, among SAGA SYSTEMS, Acquisition
Corp. and Software AG.
99.1 Text of News Release Relating to the Merger dated
November 2, 2000.
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