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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
Date of Report (Date of earliest event reported): May 3, 2000
Aviation Group, Inc.
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(Exact name of registrant as specified in its charter)
Texas 0-10124 75-2631373
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification No.)
700 North Pearl Street, Suite 2170, Dallas, Texas 75201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 922-8100
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(Former name or former address, if changed from last report)
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Item 5. Other Events.
Aviation Group, Inc., a Texas corporation (the "Company"), and
travelbyus.com ltd., an Ontario corporation ("travelbyus") announced that they
entered into on May 3, 2000 a formal agreement to combine their businesses
through a statutory arrangement under Canadian law. The Company and travelbyus
had previously announced their intentions to enter into a formal agreement to
combine their businesses.
In addition, the Company announced that it completed the acquisition of
Global Leisure Travel, Inc., a Washington corporation ("GLTI"), through a merger
between a subsidiary of the Company and GLTI effective on May 10, 2000. The
Company had previously reported on a Form 8-K Current Report dated March 2,
2000, as amended, its acquisition of a controlling interest in GLTI.
The Company hereby incorporates by reference into this Item 5 the press
releases attached hereto as Exhibits 99.1 and 99.2
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press release of Aviation Group, Inc. issued May 18,
2000.
99.2 Press release of Aviation Group, Inc. issued May 18,
2000.
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.
AVIATION GROUP, INC.
Dated as of May 18, 2000 By: /s/ Richard L. Morgan
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Richard L. Morgan,
Executive Vice President
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Press Release Exhibit 99.1
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travelbyus.com ltd. and Aviation Group, Inc.
Announce Arrangement Agreement
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May 18, 2000
Dallas, Texas and Vancouver, BC: travelbyus.com ltd. (Toronto Stock Exchange:
"TBU" and Frankfurt Stock Exchange: "TVB") and Aviation Group, Inc. (Nasdaq
SmallCap: "AVGP" and Boston Stock Exchange: "AVG") announced they formally
agreed on May 3, 2000 to combine their businesses through a statutory
arrangement under Canadian law. The completion of the arrangement is subject to
receipt of requisite regulatory approval, including without limitation the
approval of an Ontario, Canada court, the Toronto Stock Exchange and the
Canadian Venture Exchange. When the arrangement is completed, travelbyus.com
will become an indirect subsidiary of Aviation Group. The arrangement will
result in a change in control of Aviation Group. Former travelbyus.com
shareholders will own directly or indirectly more than 90% of Aviation Group's
outstanding common stock after completion of the arrangement.
The arrangement will result in travelbyus.com shareholders receiving
one exchangeable share in travelbyus.com for each common share they currently
own. Each exchangeable share may be exchanged by the holder for one share of
Aviation Group common stock. The exchangeable shares of travelbyus.com not
previously exchanged will be automatically exchanged into Aviation Group common
stock on January 1, 2003 or earlier on the occurrence of certain events. The
exchangeable shares will entitle their holders to dividends and other rights
that are, as nearly as practicable, economically equivalent to those of Aviation
Group common stock. They will also entitle their holders to vote at meetings of
Aviation Group shareholders through a voting trust.
As of May 1, 2000, Aviation Group and travelbyus.com had approximately
3,949,000 and 75,105,000 common shares outstanding, respectively.
For travelbyus.com, the arrangement will allow greater access to U.S.
capital markets, will significantly expand its travel products by those offered
by Aviation Group's new subsidiary, Global Leisure Travel, Inc., and through the
sale of non-strategic assets of Aviation Group, should provide funds for the
combined companies.
For Aviation Group, the arrangement will enable it to shift its assets
and capital into an industry with significant growth opportunities. Since August
1999, Aviation Group has sought to sell its businesses to fund acquisitions with
growth opportunities.
The combined companies expect to have greater access to the capital
markets to support future growth. Aviation Group intends to apply for listing of
its common stock on Nasdaq's National Market and the Frankfurt Stock Exchange.
The combined companies are expected to be better able than Aviation Group or
travelbyus.com alone to attract new investors and to obtain financing to pursue
acquisitions and fund growth.
To consummate the arrangement, the companies will seek approval of
their respective shareholders and the approval of an Ontario court as to the
terms of the arrangement. It is currently
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anticipated that special meetings of the shareholders of travelbyus.com and
Aviation Group will be held some time in August 2000.
The respective financial advisors to the companies have rendered their
fairness opinions. CIBC World Markets Corp., as advisor to Aviation Group, has
opined that the consideration to be received by the shareholders of
travelbyus.com pursuant to the arrangement agreement is fair to the shareholders
of Aviation Group from a financial point of view. Wellington West Capital, Inc.,
as advisor to travelbyus.com, has opined that the one-for-one share exchange
ratio under the arrangement agreement is fair to the shareholders of
travelbyus.com from a financial point of view.
The companies expect to account for the arrangement under the purchase
method of accounting as if travelbyus.com had acquired Aviation Group and had
been recapitalized under the capital structure of Aviation Group.
travelbyus.com is an Internet-based travel company. travelbyus.com's
Web site, www.travelbyus.com, provides consumers with on-line travel options 24
hours per day. Through the travelbyus.com Web site, consumers have the ability
to browse travel options world-wide and to book travel reservations. In addition
to offering consumers travel options through the Internet, travelbyus.com also
offers the consumer travel options through 1-800 call centers and traditional
travel agencies. Since April 1999, travelbyus.com has focused on completing
strategic acquisitions to build the components of travelbyus.com's business
model, which include product offerings, distribution, marketing and technology.
travelbyus.com provides a broad range of travel products, targeted primarily at
the leisure customer, including airline tickets, cruise packages and ground
packages.
Aviation Group provides services and products to airline companies and
other aviation firms primarily in the United States. Aviation Group's businesses
consists of painting and paint stripping services for commercial and freight
aircraft and the manufacture, sale and repair of aircraft batteries and aircraft
and truck weighing scales. On May 10, 2000, Aviation Group completed its
acquisition of Global Leisure Travel, Inc. Global Leisure is primarily engaged
in the wholesale and retail sale of travel packages for both domestic and
Pacific Island and Australian destinations. Travel packages created by Global
Leisure include airline tickets, hotel accommodations, automobile rentals and
other land components. Global Leisure contracts with vendors and primarily
markets the packages directly to retail travel agents.
Following closing of the statutory arrangement, the combined companies
will focus on developing and expanding the travelbyus.com travel business.
Aviation Group's existing businesses, other than Global Leisure, are expected to
be sold.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor shall there be any sale of
any securities in any state or Canadian province in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under applicable securities laws. Prospective investors are urged to read, when
filed with the Securities and Exchange Commission, the joint proxy
statement/prospectus and registration statement that will be filed by Aviation
Group, Inc. in connection with the transactions described in this press release.
After filing, these documents will be available for free at the Securities and
Exchange Commission's EDGAR website at www.sec.gov and may be obtained for free
from Aviation Group, Inc. upon request.
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Except for the historical information contained herein, this press
release contains statements that constitute forward-looking statements, as
defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. Factors that
may cause or contribute to such differences include, among other things, the
ability to close the proposed transaction disclosed above, dependence on certain
vendors, changes in the travel industry, seasonability of business, risk of
future losses from operations, regulation and development of the Internet, brand
identification of travelbyus.com's business, declines in travel commission
rates, technological changes, the ability to sell or merge all or a portion of
Aviation Group's businesses, environmental regulation and increased competition
in the on-line travel services industry. Other risks and uncertainties include
changes in business conditions and the economy in general, changes in
governmental regulations, unforeseen liquidation and other risk factors
identified in public filings by Aviation Group or travelbyus.com under "Risk
Factors." Aviation Group and travelbyus.com do not undertake any obligation to
update these forward-looking statements for revisions or changes after the date
of this press release.
Contacts:
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travelbyus.com, ltd.:
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Bill Kerby
Chief Executive Officer
Telephone: (604) 541-2400
E-Mail: [email protected]
Aviation Group, Inc.:
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Lee Sanders
Chairman
Telephone: (214) 922-8100, ext. 1100
E-Mail: [email protected]
Richard Morgan
Executive Vice President, CFO
Telephone: (214) 922-8100, ext. 1102
E-Mail: [email protected]
Press Contacts:
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North America: Barry S. Kaplan
Telephone: (732) 747-0702
E-Mail: [email protected]
Europe: Christopher Bruening
Telephone: 49 61 96 88 00 210
E-Mail: [email protected]
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Press Release Exhibit 99.2
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Aviation Group, Inc. Announces
Completion of Acquisition of
Global Leisure Travel, Inc.
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May 18, 2000
Dallas, Texas: Aviation Group, Inc. (Nasdaq SmallCap: "AVGP") announced the
completion of its acquisition of Seattle-based Global Leisure Travel, Inc. The
acquisition is the first step in a previously announced three-way business
combination among Aviation Group, Global Leisure and travelbyus.com ltd.
(Toronto Stock Exchange: "TBU"; Frankfurt Stock Exchange: "TVB").
The acquisition was completed through a merger of Global Leisure with
Aviation Group's subsidiary effective on May 10, 2000 making Global Leisure a
wholly-owned subsidiary of Aviation Group. As consideration for the purchase,
Aviation Group issued:
- - $16,500,000 in liquidation preference, represented by 1,650 shares of
Series A convertible preferred stock and Series A warrants to purchase
750,000 shares of Aviation Group common stock to the former owners of
Global Leisure in exchange for the transfer or cancellation of the stock
and indebtedness owned by them and their affiliates; and
- - Series B warrants to purchase 3,500,000 shares of Aviation Group common
stock to the former warrantholders of Global Leisure in exchange for
cancellation of their warrants.
Prior to and in connection with the acquisition, Aviation Group also
invested $20.9 million in Global Leisure. These funds were used primarily to pay
debts and other payables of Global Leisure. The financing for this investment by
Aviation Group in Global Leisure was provided by:
- - $5.0 million invested in Aviation Group by travelbyus.com through the
purchase of 500 shares of Series B preferred stock from Aviation Group at
$10,000 per share;
- - $2.0 million invested in Aviation Group by private investors in the
purchase of 750,000 shares of Aviation Group common stock at $2.667 per
share; and
- - Approximately $16.5 million invested in Aviation Group by private investors
in the purchase of approximately 1,650 units of Aviation Group's Series B
preferred stock and Series C warrants, at a price of $10,000 per unit, each
unit consisting of one share and 750 warrants.
Upon the completion of the business combination with travelbyus.com,
Aviation Group agreed to deliver to the broker/dealer arranging the financing
for its investment in Global Leisure, Doerge Capital Management, a division of
Balis Lewittes & Coleman, Inc., a fee of $1.0 million and warrants to purchase
1.5 million shares of Aviation Group common stock at exercise prices ranging
from $1.50 to $6.50 per share, with a weighted average exercise price of $4.07
per share.
Global Leisure is primarily engaged in the wholesale and retail sale of
travel packages for both domestic and Pacific Island and Australian
destinations. Travel packages created by Global
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Leisure include airline seats, hotel accommodations, automobile rentals and
other land components. Global Leisure contracts with vendors and primarily
markets the packages directly to retail travel agents.
Global Leisure maintains contracts with several major airlines, hotel
operators and touring companies, including United Airlines, Continental
Airlines, Delta Airlines, Hawaiian Airlines, Alaskan Airlines, Outrigger Hotels
Hawaii, and Hotel Corporation of the Pacific d/b/a Aston Hotels & Resorts. These
contracts allow Global Leisure to purchase airline tickets, hotel reservations
and travel packages at wholesale prices.
Global Leisure's travel products are resold to the public through
retail travel agents and other sellers. Several tradenames under which Global
Leisure operates are "Sunmakers," "Kailani Hawaii Tours" and "Hawaii Leisure."
Global Leisure has contracts with travel agencies and suppliers of travel in
Washington, Hawaii, Nevada and California. These agencies have designated Global
Leisure as a preferred supplier for all destinations and products that Global
Leisure or its subsidiaries offer in exchange for certain sales-based
commissions.
To complete Aviation Group's acquisition of Global Leisure, Aviation
Group created several new series of preferred stock:
- - The Series A convertible preferred stock bears a 9% cumulative dividend
payable if and when declared by Aviation Group's board of directors, has
full voting rights alongside common shareholders after the earlier of
September 30, 2000 or the completion of the travelbyus.com business
combination, is redeemable at Aviation Group's option at any time, and is
convertible into common stock by the holders at any time after October 31,
2000. Aviation Group may cause the Series A preferred stock to be converted
into common stock at any time prior to a new equity or debt financing after
the closing of the travelbyus.com business combination if new gross cash
proceeds of at least $25 million are received by Aviation Group. The
conversion price is the greater of $6 and the mean 21-day closing bid price
for the common stock.
- - The Series B preferred stock bears a 12% cumulative dividend payable if and
when declared by the board of directors, has no voting rights except in
limited circumstances, is redeemable at Aviation Group's option at any
time, and is not convertible. This series ranks senior to the Series A
preferred stock as to liquidation and dividend rights. Aviation Group is
required to redeem the Series B preferred stock to the extent of the net
cash proceeds from the sale of any assets of Aviation Group out of the
ordinary course of business or any public debt or equity securities after
completion of the travelbyus.com business combination.
The Series A, B and C warrants issued by Aviation Group have exercise
prices of $5, $3 and $3, respectively, and expire on the earlier of March 31,
2005 and the second anniversary of the date the shares of common stock issuable
on the exercise of the warrants are registered for resale under the Securities
Act of 1933, as amended. Aviation Group intends to register the underlying
shares of common stock for resale under that Act. None of the warrants are
exercisable until their issuance is approved by Aviation Group's shareholders.
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travelbyus.com is an Internet-based travel company. travelbyus.com's
Web site, www.travelbyus.com, provides consumers with on-line travel options 24
hours per day. Through the travelbyus.com Web site, consumers have the ability
to browse travel options world-wide and book travel reservations. In addition to
offering consumers travel options through the Internet, travelbyus.com also
offers the consumer travel options through 1-800 call centers and traditional
travel agencies. Since April 1999, travelbyus.com has focused on completing
strategic acquisitions to build the components of travelbyus.com's business
model, which include product offerings, distribution, marketing and technology.
travelbyus.com provides a broad range of travel products, targeted primarily at
the leisure customer, including airline tickets, cruise packages and ground
packages.
Aviation Group provides services and products to airline companies and
other aviation firms primarily in the United States. Aviation Group's businesses
consist of painting and paint stripping services for commercial and freight
aircraft and the manufacture, sale and repair of aircraft batteries and aircraft
and truck weighing scales.
Following closing of the travelbyus.com business combination, the
combined companies will focus on developing and expanding the travelbyus.com
travel business. Aviation Group's existing businesses, other than Global
Leisure, are expected to be sold.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor shall there be any sale of
any securities in any state or Canadian province in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under applicable securities laws. Prospective investors are urged to read, when
filed with the Securities and Exchange Commission, the joint proxy
statement/prospectus and registration statement that will be filed by Aviation
Group, Inc. in connection with the transactions described in this press release.
After filing, these documents will be available for free at the Securities and
Exchange Commission's EDGAR website at www.sec.gov and may be obtained for free
from Aviation Group, Inc. upon request.
Except for the historical information contained herein, this press
release contains statements that constitute forward-looking statements, as
defined in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements. Factors that
may cause or contribute to such differences include, among other things, the
ability to close the proposed transaction disclosed above, dependence on certain
vendors, changes in the travel industry, seasonability of business, risk of
future losses from operations, regulation and development of the Internet,
declines in travel commission rates, technological changes, the ability to sell
or merge all or a portion of Aviation Group's businesses, environmental
regulation and increased competition in the on-line travel services industry.
Other risks and uncertainties include changes in business conditions and the
economy in general, changes in governmental regulations, unforeseen liquidation
and other risk factors identified in public filings by Aviation Group under
"Risk Factors." Aviation Group does not undertake any obligation to update these
forward-looking statements for revisions or changes after the date of this press
release.
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Contacts:
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Lee Sanders
Chairman
Telephone: (214) 922-8100, ext. 1100
E-Mail: [email protected]
Bill Kerby
Chief Executive Officer
Telephone: (604) 541-2400
E-Mail: [email protected]
Press Contacts:
- --------------
North America: Barry S. Kaplan
Telephone: (732) 747-0702
E-Mail: [email protected]
Europe: Christopher Bruening
Telephone: 49 61 96 88 00 210
E-Mail: [email protected]
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