Filed by Policy Management Systems Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Commission File No. 1-10557
Contact: Timothy V. Williams Charles T. Conway, Jr.
Executive Vice President & Director
Chief Financial Officer Corporate Communications
(803) 333-5638 (803)333-5348
e-mail:[email protected] e-mail:[email protected]
PMSC ANNOUNCES AGREEMENT WITH WELSH, CARSON, ANDERSON & STOWE
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STOCKHOLDERS CAN RECEIVE $14 PER SHARE IN CASH FOR
75 TO 93 PERCENT OF THE SHARES
WCAS COMMITS UP TO $604 MILLION IN THE RECAPITALIZATION
NEW BUSINESS MODEL TO INCREASE FOCUS ON EBUSINESS AND BUSINESS PROCESS
OUTSOURCING
AS INSURANCE AND FINANCIAL SERVICES CUSTOMERS RAMP-UP INTERNET USE
COLUMBIA, S.C., MARCH 30, 2000 -- Policy Management Systems Corporation
(NYSE:PMS) announced today that it has signed a definitive agreement with an
affiliate of Welsh, Carson, Anderson & Stowe ("WCAS"), a leading New York-based
private investment firm, to affect a recapitalization of the company. The
company will continue to operate as a public company with its current management
and under its new name, Mynd. PMSC's Board of Directors has approved the
transaction.
Under the terms of the agreement, WCAS has committed to provide up to
approximately $604 million of capital, of which $75 million will be used for
investments in new strategic initiatives and other general corporate purposes.
Stockholders will have the right to elect to either retain their shares or
receive $14 per share in cash consideration, subject to between 75% and 93% of
the existing shares being converted to cash. PMSC's existing stockholders will
retain between 7% to 25% of the post-merger common stock.
Larry Wilson, Chairman and Chief Executive Officer of PMSC, said, "We are
confident that this is the right step at this moment in the company's transition
to a new
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business model with a focus on eBusiness. This investment will substantially
strengthen our capital base and enable us to increase our focus on delivering
new, flexible solutions to our insurance and financial services customers. We
believe we will be positioned to capitalize on the substantial growth
opportunities in our markets."
A spokesman for WCAS said, "PMSC is a company with a proven record of
technological innovation, a strong customer base and a commitment to adapt its
products and services to the rapidly developing world of eBusiness. Our
investment reflects our strong belief that as an equity partner with a long-term
perspective, we will give PMSC the financial strength to complete its transition
to a new business model and invest in innovative technologies. As the pace of
technological change accelerates, we believe that, working together with PMSC's
management and employees, we will create substantial growth."
The transaction is expected to be completed during the second or third
quarter of this year and is subject to approval by PMSC's stockholders, the
receipt of financing and other customary conditions. The financing necessary
for the transaction has been fully committed by WCAS and an affiliate of
Donaldson, Lufkin & Jenrette. A special meeting of PMSC's stockholders will
take place as soon as practical following approval of proxy materials by the
Securities and Exchange Commission. PMSC's Board was advised by Credit Suisse
First Boston. WCAS was advised by Donaldson, Lufkin & Jenrette.
In the event the agreement is terminated under certain
circumstances, PMSC has agreed to pay WCAS a termination fee of $19 million plus
expenses of up to $5 million.
WCAS, founded in 1979, is one of the leading private equity firms in
the country, with assets under management of approximately $8 billion. It
focuses exclusively on the information services, communications and health care
industries and invests out of a $3.2
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billion equity fund and a $1.4 billion subordinated debt fund. In addition to
this investment, WCAS has sponsored a number of transactions with leading
information services companies including The Bisys Group Inc., SunGuard Data
Systems, Inc., Fiserv Inc., Amdocs Ltd., Bridge Information Systems, and Comdata
Holdings Corporation.
PMSC, headquartered in Columbia, S.C., is a leading provider of application
software, related automation support and information services designed to meet
the needs of the global insurance and financial services industries. Information
on PMSC and its products and services can be found on the World Wide Web at
http://www.pmsc.com
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Statements about the proposed agreement are forward-looking statements that
involve risks and uncertainties. Among the factors that could cause actual
results to differ materially from those in the forward looking statements are:
the failure of the agreement to be consummated and those factors in PMSC's 1999
Annual Report on Form 10K and other reports and filings with the U.S. Securities
and Exchange Commission. PMSC disclaims any intention or obligation to update or
revise any forward looking statements.
Investors are urged to read the Current Report on Form 8-K and proxy
statement/prospectus relating to the agreement and any other relevant documents
filed by PMSC with the Securities and Exchange Commission, when available,
because they will contain important information. Investors will be able to
obtain these documents, when available, for free from the SEC's web site,
www.sec.gov or from PMSC investor services at http://www.pmsc.com
