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UNITED STATES
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: APRIL 8, 1998
DATE OF EARLIEST EVENT REPORTED: APRIL 1, 1998
PRIMARK CORPORATION
(Exact name of registrant as specified in its charter)
1-8260
(Commission File Number)
MICHIGAN 38-2383282
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 WINTER STREET, SUITE 4300N, WALTHAM, MA 02154
(Address of principal executive offices) (Zip Code)
617-466-6611
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 1, 1998, the Company completed the sale of all of the outstanding
common stock of TASC, Inc. and The Analytic Sciences Corporation Limited to
Litton Industries and its affiliate, pursuant to a Stock Purchase Agreement
dated as of December 8, 1997. In connection with the sale, the Company received
$432 million in cash, subject to post closing adjustments. The sale was approved
by a majority vote of the Primark shareholders on March 30, 1998.
Part of the proceeds from this sale was used to repay in full the $220 million
outstanding bank term debt of Primark, as well as $30 million outstanding on its
current revolving credit facility. In addition, on May 8, 1998, the Company will
redeem in full its $112 million, 8.75% Senior Notes due October 15, 2000 at
104.375%.
In addition to the foregoing, on April 1, 1998, the Company increased the
borrowing capacity of its Revolving Credit Facility from $75 million to $225
million.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
Not Applicable
(b) PRO FORMA FINANCIAL INFORMATION
PRIMARK CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma consolidated financial information for the year ended
December 31, 1997 presented herein gives effect to the Company's sale of TASC,
Inc. and The Analytic Sciences Corporation Limited. For purposes of the
Unaudited Pro Forma Consolidated Financial Information, the term TASC shall mean
TASC, Inc., its affiliates and TASC U.K. The unaudited pro forma financial
information is based upon the historical financial statements of Primark and
TASC for the year ended December 31, 1997.
The Unaudited Pro Forma Consolidated Financial Statements give effect to events
that are directly attributable to the sale and expected to have a continuing
impact on the Company. Explanations for these adjustments are included in the
Notes to the Unaudited Pro Forma Consolidated Condensed Balance Sheet and Income
Statement. The pro forma condensed consolidated income statement includes the
operations of Baseline Financial Services, Inc. and WEFA Holdings, Inc. from
their January 6, 1997 and February 7, 1997 dates of acquisition, respectively.
Other than inclusion of operations from their respective dates of acquisition,
the Unaudited Pro Forma Consolidated Statements do not include the impact of pro
forma adjustments related to these acquisitions as they were not material in the
aggregate or on a stand alone basis.
The Company's Unaudited Pro Forma Consolidated Financial Information should be
read in conjunction with the historical financial statements of Primark
incorporated herein by reference and the information contained in the Company's
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" which is also incorporated herein by reference.
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PRIMARK CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Unaudited
Proposed Pro
As Reported Transaction Adjustments Forma
----------- ----------- ----------- ---------
(Thousands)
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 12,780 $ 427,606 (2) $(427,606)(3) $ 12,780
Accounts receivable 79,630 79,630
Federal and state income tax benefit 21,304 21,304
Net assets of discontinued operations 197,330 (155,376)(2) 41,954
Other current assets 24,036 24,036
Goodwill, net 556,737 556,737
Capitalized data and other intangibles, net 47,512 (3,665)(4) 43,847
Capitalized software, net 48,645 48,645
Other assets 8,980 8,980
Property, plant and equipment 46,855 46,855
---------- --------- --------- --------
Total assets $1,043,809 $ 272,230 $(431,271) $884,768
========== ========= ========= ========
Notes payable $ 27,602 $ 27,602
Accounts payable and accrued liabilities 38,710 (2,329)(3) 36,381
Federal, State, Foreign and other taxes payable 10,717 $ 94,061(2) (94,061)(3) 8,855
(1,862)(6)
Deferred income 69,931 69,931
Long term debt 342,561 (325,772)(3) 16,789
Deferred income taxes 21,133 (1,600)(4) 19,533
Other liabilities 61,277 61,277
Minority interest 907 907
Stockholders' equity 470,971 178,169(6) (3,038)(5) 643,493
(2,609)(4)
---------- --------- --------- --------
Total liabilities and stockholders' equity $1,043,809 $ 272,230 $(431,271) $884,768
========== ========= ========= ========
</TABLE>
The notes to the unaudited pro forma condensed consolidated financial
statements are an integral part of this statement
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PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
1. TASC
The pro forma condensed consolidated balance sheet gives effect to the
sale of TASC, Inc. and The Analytical Sciences Corporation Limited to
Litton Industries and its affiliates, pursuant to a Stock Purchase
Agreement dated December 8, 1997.
2. PROPOSED TRANSACTION
The pro forma condensed consolidated balance sheet gives effect to the
sale of TASC for $432,000,000 net of closing adjustments estimated to
be $1,506,000 for the period ended December 31, 1997 and estimated
transaction costs and success fees of $5,900,000. Income taxes
associated with the sale of TASC are estimated to be $94,061,000.
3. USE OF PROCEEDS
The pro forma condensed consolidated balance sheet gives effect to the
use of proceeds to (i) prepay all amounts outstanding on the Company's
$112,000,000 senior callable bonds, including a 4.375% premium
aggregating $4,900,000 together with the accrued interest thereon, (ii)
repay $214,316,000 of the Company's outstanding term loan together with
accrued interest thereon, and (iii) to fund the estimated income tax
liability associated with the proposed transaction of $94,061,000.
4. DEBT ISSUE COSTS
The pro forma condensed consolidated balance sheet gives effect to the
write off of unamortized debt issue cost of $3,665,000 and related tax
benefit of $1,393,000 associated with prepayment of the senior callable
bonds and term loan described in (3) above. In addition, at December
31, 1997 there was $544,000 of unamortized original issue discounts
that have been written off, net of a related tax benefit of $207,000.
Such amounts will be reflected as an extraordinary item in the
Company's consolidated statement of income.
5. DEBT PREPAYMENT PREMIUM
The pro forma condensed consolidated balance sheet gives effect to a
charge for the prepayment premium of $4,900,000 net of tax benefit of
$1,862,000 as described in (2) above. Such amounts will be reflected as
an extraordinary item in the Company's consolidated statement of
income.
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PRIMARK CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Unaudited
Pro
As Reported Adjustments Forma
----------- ---------- ---------
(Thousands Except Per Share Amounts)
<S> <C> <C> <C>
Operating Revenues $397,875 $397,875
-------- ------- --------
Operating Expenses:
Cost of Services 157,327 157,327
Selling General and Administrative 151,559 151,559
Depreciation 17,371 17,371
Amortization of Goodwill 15,805 15,805
Amortization of other intangible assets 17,029 (959)(3) 16,070
Restructuring Charge 6,800 6,800
-------- ------- --------
Total Operating Expenses 365,891 (959) 364,932
-------- ------- --------
Operating Income 31,984 959 32,943
-------- ------- --------
Other Income and (Deductions)
Investment income 1,085 1,085
Interest Expense (15,986) 14,358(2) (1,628)
Foreign Currency Gain (loss) 1,831 1,831
Other 1,039 1,039
-------- ------- --------
Total Other (12,031) 14,358 2,327
-------- ------- --------
Income From Continuing Operations
Before Income Taxes 19,953 15,317 35,270
Income Taxes 12,963 5,820(4) 18,783
-------- ------- --------
Income From Continuing Operations 6,990 $ 9,497 16,487
======== ======= ========
Basic
Earnings per Common Share $ 0.26 $ 0.63
Weighted Average Shares 26,348 26,348
Assuming Dilution
Earnings per Common Share 0.25 0.59
Weighted Average Shares 27,944 27,944
</TABLE>
The notes to the unaudited pro forma condensed consolidated financial
statements are an integral part of this statement
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PRIMARK CORPORATION AND SUBSIDIARIES
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
1. TASC
The pro forma condensed consolidated income statement gives effect to the
sale of TASC, Inc. and The Analytical Sciences Corporation Limited to
Litton industries and its affiliates, pursuant to a Stock Purchase
Agreement dated December 8, 1997.
2. INTEREST EXPENSE
The pro forma condensed consolidated income statements give effect to the
reduction of interest expense as a result of the application of the
proceeds from the transaction to repay outstanding debt balances.
3. DEBT ISSUE COSTS
The pro forma condensed consolidated income statements give effect to the
reduction in amortization of debt issue costs as a result of the Company's
assumed repayment of outstanding debt.
4. INCOME TAXES
The pro forma condensed consolidated income statements give effect to the
tax benefit of adjustment (2) and (3), as described above, at an
incremental rate of 38%.
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(c) EXHIBITS
Exhibit
Number Description
- ------ -----------
2.1* Stock Purchase Agreement by and among Primark Corporation, Primark
Information Services UK Limited and Litton Industries, Inc. and Litton
U.K. Limited dated as of December 8, 1997 (Exhibit 2.1 to the Company's
December 10, 1997 Form 8-K).
2.2* Information Technology Services Agreement by and among Primark
Corporation, TASC, Inc. and Litton Industries, Inc. (Exhibit 2.2 to the
Company's December 10, 1997 Form 8-K).
99.1 Press Release dated April 1, 1998.
* Incorporated by reference to File No. 1-8260.
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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 thereunto duly authorized.
PRIMARK CORPORATION
Date: April 3, 1998 By: /s/ STEPHEN H. CURRAN
------------------------------
Stephen H. Curran
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
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EXHIBIT 99.1
[PRIMARK LOGO] NEWS
RELEASE
PRIMARK CORPORATION
1000 Winter Street, Suite 4300N
Waltham, MA 02154-1248
http://www.primark.com
Contact:
Jim Flanagan, Primark
(781) 487-2131
PRIMARK COMPLETES THE SALE OF TASC, INC.
COMPANY TO REPAY ALL BANK DEBT AND REDEEM SENIOR NOTES
WALTHAM, MA, April 1, 1998 -- Primark Corporation (NYSE/PSE: PMK) today
announced that it has completed the previously announced sale of its TASC, Inc
unit to Litton Industries, Inc. for a cash purchase price of $432 million,
subject to post closing adjustments. Included in the sale is TASC's weather
information subsidiary, WSI Corporation, and affiliated weather information
companies headquartered in the United Kingdom. Primark's shareholders approved
overwhelmingly the sale of TASC in a special meeting of shareholders on March
30, 1998.
"The sale of TASC allows us to focus on the development and integration of our
financial, economic and market research information business," said Joseph E.
Kasputys, Primark chairman and chief executive officer. However, we have entered
into a three-year Information Technology Services Agreement to obtain continued
technical support from TASC, which will help to keep our information products
and operations at the leading edge of technology," Kasputys continued.
Part of the proceeds from this sale has been used to repay in full the $220
million outstanding bank term debt of Primark. In addition, Primark announced
today that on May 8, 1998 it will redeem in full the company's $112 million,
8.75% Senior Notes due October 15, 2000. With a call premium of 4.375%, the
total payment by the company will be $116.9 million. In related actions, the
company has amended its revolving credit agreement to increase this bank
facility from $75 million to $225 million. Upon redemption of the Senior Notes,
the company will have no debt outstanding and the full $225 million of revolver
capacity will be available for corporate purposes.
"The elimination of all our debt provides Primark with considerable financial
capacity, along with the flexibility to pursue various corporate strategies for
growth," said Kasputys. "As previously announced, we are actively evaluating
strategic alternatives to increase shareholder value. We expect to have
additional information to report by the end of this month," Kasputys concluded.
Primark Corporation (www.primark.com), headquartered in Waltham, Massachusetts,
is a $400 million global information services company that collects, integrates
and delivers financial, economic and market research information. Primark has
customers in 61 countries and 80 offices in 21 countries, and serves financial,
corporate and government decision-makers worldwide.
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