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SECURITIES AND ECHANGE 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 (Date of earliest event reported) JUNE 1, 1998
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ALPHA MICROSYSTEMS
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(Exact name of registrant as specified in charter)
CALIFORNIA 0-10558 95-3108178
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2722 SOUTH FAIRVIEW STREET, SANTA ANA, CALIFORNIA 92704
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (714) 957-8500
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 5. Other Events
Attached hereto as Exhibit 99, is a Press Release announcing ING Equity
Partners II, L.P. proposed investment in Alpha Microsystems.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibits: The following is included with this report:
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Item Exhibit No.
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Press Release 99
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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.
Date: June 1, 1998 ALPHA MICROSYSTEMS
By: /s/ Douglas J. Tullio
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Douglas J. Tullio
President and Chief Executive
Officer
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Exhibit 99
FOR RELEASE JUNE 1, 1998 AT 7:30 A.M. EDT
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Contact:
Porter, LeVay & Rose, Inc.
Michael Porter or
Jonathan Gordon
212/564-4700
ING EQUITY PARTNERS SIGNS LETTER OF INTENT TO PROVIDE
ALPHA MICROSYSTEMS WITH AN EQUITY INVESTMENT OF UP TO
$20 MILLION
SANTA ANA, Calif., . . . June 1, 1998 . . . Alpha Microsystems (NASDAQ NM: ALMI)
today announced that it has signed a letter of intent with the private equity
firm of ING Equity Partners II, L.P. whereby ING has agreed to invest up to $20
million in Redeemable Exchangeable Preferred Stock of Alpha Micro. All of the
terms and conditions of an initial $8 million investment and two subsequent
investments totaling up to an additional $12 million, are subject to the
negotiation, preparation and execution of definitive agreements, the
satisfactory completion of due diligence by ING, and other conditions including
Alpha Microsystems' completion of a mutually acceptable IT services business
acquisition. If completed in accordance with the terms of the letter of intent,
ING's investment will provide Alpha Microsystems with capital to further grow
its IT services business through key acquisitions, as well as provide the
Company with additional working capital. Under the terms of the letter of intent
ING will receive 10-year warrants to purchase common stock of Alpha Microsystems
for $2.50 per share, representing a premium to the historical 90-day average
closing price of the common stock. The warrants will grant ING the right to
acquire approximately 20 percent, in the event of the minimum $8 million
investment, and up to approximately 44 percent, in the event of a maximum $20
million investment, of the outstanding shares of common stock of the Company on
a fully diluted, post-issuance basis.
Alpha Microsystems President and CEO Douglas J. Tullio said, "We are pleased
that ING Equity Partners has recognized the potential of our growing businesses.
This investment from ING will provide Alpha Micro with the ability to pursue
growth strategies within the IT services business through acquisitions and
organic growth, and will allow us to further establish the market position of
AlphaCONNECT within the Internet industry."
Tullio added, "ING has an established track record in helping companies execute
growth plans and enhance market values. As our equity sponsor, we look forward
to ING's experience and expertise in assisting Alpha Micro to reach its full
business potential."
According to ING Partner Benjamin Giess, "We have been impressed with Alpha
Microsystems' strategic repositioning of its business and, particularly, its
future growth prospects. Alpha Microsystems has a strong, talented management
team and the core competitive strengths needed to propel its business
strategies. ING is pleased to submit terms for an investment in Alpha
Microsystems."
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As contemplated by the terms of the letter of intent, dividends will be payable
on the Redeemable Exchangeable Preferred Stock to be purchased by ING at an
initial nine percent cumulative annual dividend rate, which increases one
percent annually after the second anniversary. The Preferred Stock must be
redeemed in seven years. The warrants will have customary anti-dilution
protection. Investments by ING under the terms of the letter of intent are to be
made in three tranches. ING's initial tranche, which is $8 million, will be
invested at the initial closing. The second tranche of $7 million and the third
tranche of $5 million are subject to, among other conditions, approval of Alpha
Microsystems' shareholders and, if approved and consummated, will be in exchange
for Preferred Stock and warrants to purchase common stock constituting up to
14.5 percent and 9.5 percent ownership in the Company by ING, respectively. If
Alpha Microsystems elects to redeem the Preferred Stock prior to June 30, 2000,
the shares purchasable pursuant to the Warrants will be reduced. Under the terms
of the letter of intent, Alpha Microsystems will expand its board of directors
to seven members, of which ING will designate three directors.
ING Equity Partners is a New York-based private equity firm investing in growth
financings, buyouts, acquisitions, consolidations and corporate restructurings
of U.S.-based middle market companies. The first endeavor, ING Equity Partners,
L.P. I and its predecessor organization at ING Group, has invested over $400
million since August 1990. The second fund, ING Equity Partners II, L.P. was
established in July of 1997 with $357 million of committed capital. To date, ING
Equity Partners has invested in 27 companies representing a wide range of
industries including media and telecommunications, retailing, manufacturing and
healthcare.
With over 50 locations throughout North America, Alpha Microsystems is dedicated
to providing a consistent level of high-quality computer services such as
consulting, maintenance and networking for small, mid-sized and large
corporations nationwide. Alpha Microsystems -- a 20-year-old, Santa Ana, Calif.
Company -- also serves the Internet/intranet market through its AlphaCONNECT
division, which includes business-to-business software and technologies. For
more information, visit the Company's Web site at www.alphamicro.com.
Certain statements in this press release, including statements that the
investment from ING will provide Alpha Micro with the ability to pursue growth
strategies within the IT services business through acquisitions and organic
growth and will allow us to further establish the market position of
AlphaCONNECT within the Internet industry, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks and
uncertainties, including (i) the economic and competitive environment of the
computer maintenance and IT support services industry in general, and in the
Company's specific market areas, (ii) its ability to identify acquisition
candidates, (iii) the Company's ability to successfully integrate acquired
operations with its existing operations, (iv) the Company's ability to develop,
produce, and market products and services that incorporate new technology, are
priced competitively, and achieve significant market acceptance, (v) whether the
Company's products and IT services will be commercially successful or
technically advanced due to the rapid improvements in computer technology and
resulting product obsolescence, (vi) changes in the cost of IT services (vii)
the Company's ability to deliver commercial quantities of new products in a
timely manner, (viii) the Company's ability to manage risks associated with its
IT services and Internet operating strategies, (ix) changes in the Company's
operating strategy and capital expenditure plans (x) the Company's ability to
manage its expenses commensurate to its revenues and other factors which may
cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
