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 ACT OF 1934
Date of Report: February 17, 1998
DEVON GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 2-14850 03-0212800
(State of Incorporation) (Commission File (I.R.S. Employer
Number) Identification No.)
281 Tresser Boulevard, Suite 501, Stamford, Connecticut 06901
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (203) 964-1444
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Item 5. Other Events.
See Exhibit 20 - Other Documents or Statements to Security Holders
filed as part of the report.
Item 7. Financial Statements and Exhibits
Exhibit 20 - Other Documents or Statements to Security Holders.
Joint press release of Devon Group, Inc. and Applied Graphics
Technologies, Inc. made on February 17, 1998.
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 thereunto duly authorized.
DEVON GROUP, INC.
Date: February 23, 1998 s/Bruce K. Koch
Bruce K. Koch
Executive Vice President
Operations and Finance
and Chief Financial Officer
(Principal Financial Officer)
s/Robert H. Donovan
Robert H. Donovan
Senior Vice President, Finance
and Treasurer
(Principal Accounting Officer)
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EXHIBIT 20
News Release DEVON GROUP, INC. APPLIEDGRAPHICS
T E C H N O L O G I E S
Contacts:
Bruce K. Koch Jason Lynch
Devon Group, Inc. Jim Fingeroth
(203) 964-1444 Kekst and Company
(212) 521-4800
Louis Salamone, Jr.
Applied Graphics Technologies
(212) 929-7275
For Immediate Release
APPLIED GRAPHICS TECHNOLOGIES AND DEVON GROUP SIGN
AGREEMENT AND PLAN OF MERGER
NEW YORK, Feb. 17, 1998 -- Applied Graphics Technologies, Inc.
(Nasdaq:AGTX) ("AGT") and Devon Group, Inc. (Nasdaq:DEVN) ("Devon")
announced today that they had signed a definitive agreement and
plan of merger. Under the agreement, holders of Devon common stock
will receive, for each Devon share, $30 in cash and a tax-free
distribution of 0.6 share of AGT common stock. Assuming a market
price of $50 per share for AGT stock, which approximates its
average market price since the beginning of the year, the
transaction equates to a total value of approximately $440 million,
or $60 per Devon share. AGT's stock closed on Friday, February 13,
at $50 1/8.
The transaction is subject to the approval of both companies'
shareholders and the satisfaction of other customary closing
conditions, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976. The transaction is expected to
be completed in the second calendar quarter of 1998.
After the transaction, Devon will operate as a wholly owned
subsidiary of AGT, and Devon's principal subsidiaries will continue
to operate in their present form. The transaction will be
accounted for as a purchase. Marne Obernauer, Jr., Devon's current
Chairman and CEO and the holder of close to 12% of Devon's shares,
will become Vice Chairman of AGT, a Director and a key member of
its management team. One other designee of Devon will also join
AGT's Board. Mr. Obernauer and other members of Devon's management
and Board of Directors, who hold in the aggregate approximately 24%
of the outstanding Devon shares, have agreed to vote their shares
in favor of the merger.
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AGT is the nation's leading provider of outsourced digital image
management and digital prepress services, with total 1997 revenues
of approximately $185 million. Devon, through its Black Dot
subsidiary, is one of the country's largest digital prepress
companies. Black Dot's revenues for its fiscal year ended March
31, 1997 were approximately $133 million and its revenues for the
nine months ended December 31, 1997 approximated $115 million.
Black Dot specializes in providing outsourced facilities management
services to major retailers and has substantial long-term contracts
with Sears and Kmart. The combination with Devon will continue
AGT's strategy of expanding its nationwide facilities management
business. As a result of this combination, AGT's own internal
growth, and other acquisitions it has recently made, AGT will be
the country's largest provider of outsourced digital image
management and digital prepress services to publishers, retailers,
catalogers, advertising agencies, entertainment companies,
automobile manufacturers, and other large corporate clients.
Devon also operates a publishing business which publishes and
distributes images in a variety of formats, such as greeting and
note cards, posters, matted prints, art reproductions, calendars
and related products. Its revenues for the fiscal year ended
March 31, 1997 were approximately $77 million and its revenues for
the nine months ended December 31, 1997 approximated $76 million.
Fred Drasner, Chief Executive Officer of AGT, said, "The
combination with Devon will clearly establish AGT as the industry
leader, and the largest company, in the outsourced digital image
management and digital prepress areas. This combination is
convincing proof of our ability to acquire top flight companies
with solid management and strong customer relationships that we can
grow by providing a wide range of services and state of the art
technology. The combined entity will give us a solid platform for
further high quality acquisitions as we continue to consolidate
this fragmented industry and provides a tremendous opportunity for
us to fuel continued rapid organic growth."
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"This combination will provide a unique opportunity for our
shareholders both to realize current value and to participate in
the dynamic growth story of AGT," said Marne Obernauer, Jr.,
Chairman and Chief Executive Officer of Devon. "It has always been
our goal to bring the highest level of service and technology to
our customers and to continually enhance our ability to meet our
customers' needs. This combination will make our combined entity
the country's premier provider of outsourced digital image
management and digital prepress services, offering the broadest
array of creative, image management, and digital distribution
services available. I am excited about becoming a senior member of
AGT's management and a substantial investor in AGT."
Applied Graphics Technologies, Inc. is a major provider of
outsourced advanced digital image management and archiving
services, through its proprietary Digital Link System, to
publishers, advertisers and their agencies, entertainment
companies, catalogers and retailers, automobile companies and other
large corporations.
From more than 35 locations across the country, AGT supplies a
complete range of digital and traditional processes for images,
including scanning, color enhancement, image editing, archiving and
electronic distribution. AGT tailors these services to fit
specific customer needs, from conventional project and contract
vendor relationships to today's more progressive arrangements
consisting of outsourced, on-site facilities management and
complete turnkey operations. Through its Broadcast Media
Distribution Group, AGT also provides content management and the
volume reproduction and distribution of television and radio
commercials to broadcast and cable media for ad agencies and their
clients.
Note: Applied Graphics Technologies, AGT, and Digital Link System
are registered trademarks of Applied Graphics Technologies, Inc.
Other trademarks used in this document are the property of their
respective owners.
This press release contains certain forward-looking statements
which involve risks and uncertainties. There can be no assurance
that the merger will be consummated or that, if consummated, the
combined company's actual results will not differ materially from
the results anticipated in such forward-looking statements.
