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): August 14, 1998 (July 31,1998)
GRAY COMMUNICATIONS SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Georgia 1-13796 58-0285030
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(State or other
jurisdiction of (Commission File (IRS Employer
incorporation) Number) Identification Number)
126 N. Washington Street,
Albany, GA 31701
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(Address of principal executive
offices) (Zip code)
(912) 888-9390
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(Registrant's telephone number, including
area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 31, 1998, Gray Communications Systems, Inc. (the "Company") completed
the purchase of all of the outstanding capital stock of Busse Broadcasting
Corporation. The net purchase price was $112 million plus associated transaction
costs. The purchase price includes the assumption of Busse's indebtedness,
including its 11 5/8% Senior Secured Notes due 2000. Immediately prior to the
Company's acquisition of Busse, Cosmos Broadcasting Corporation acquired WEAU-TV
from Busse and exchanged it for WALB-TV, Gray's NBC affiliate in Albany,
Georgia. In exchange for WALB-TV, the Company received WEAU-TV, which was valued
at $66 million, and approximately $12 million in cash for a total value of $78
million. As a result of these transactions, Gray adds the following television
stations to its existing broadcast group: KOLN-TV, the CBS affiliate serving the
Lincoln-Hastings-Kearney, Nebraska market; its satellite station KGIN-TV, the
CBS affiliate serving Grand Island, Nebraska; and WEAU-TV, an NBC affiliate
serving the Eau Claire-La Crosse, Wisconsin market. These transactions also
satisfy the Federal Communication Commission's requirement for the Company to
divest itself of WALB-TV.
The Company funded the costs of this acquisition through a senior credit
facility with NationsBank, N.A., KeyBank National Association, CIBC, Inc.,
CoreStates Bank, N.A. and the Bank of New York. The Company will pay Bull Run
Corporation, an affiliate of the Company, a fee equal to 1% of the purchase
price for services performed.
The terms of the transactions, including the consideration paid by the Company
therefore, were determined in arms-length negotiations between the Company,
Seller and the Purchaser.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable for the Company to provide the required financial statements
of the business acquired at this time. The required statements will be filed
under separate cover of Form 8-K/A as soon as practical, but not later than
October 14, 1998.
(b) Pro Forma Financial Information.
It is impracticable for the Company to provide the required pro forma financial
information at this time. The required statements will be filed under separate
cover of Form 8-K/A as soon as practical, but not later than October 14, 1998.
(c) Exhibits.
None
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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.
Gray Communications Systems, Inc.
By: /s/Frederick J. Erickson
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Frederick J. Erickson
CHIEF FINANCIAL OFFICER
Date: August 14, 1998
