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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 (Date of earliest event reported): December 27, 1999
Commission file number 1-5064
Jostens, Inc.
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(Exact name of Registrant as specified in its charter)
Minnesota 41-0343440
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(State or other jurisdiction of (I.R.S. Employer Identification number)
incorporation or organization)
5501 Norman Center Drive, Minneapolis, Minnesota 55437
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (612-830-3300)
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Item 1. Changes in Control of the Registrant
(a) Not applicable.
(b) On December 27, 1999, Jostens, Inc. ("Jostens") entered into a
definitive Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which Jostens will be merged (the "Merger") with a
newly formed company controlled by Investcorp, a global
investment group, and certain other international co-investors.
Under the terms of the Merger Agreement, which was unanimously
approved by Jostens' Boards of Directors, Jostens' shareholders
will receive $25.25 per share in cash for substantially all of
their shares, with current shareholders continuing to own about
6% of Jostens' post-Merger equity. Following the Merger,
approximately 94% of Jostens' outstanding shares will be owned by
Investcorp, its international co-investors and Jostens'
management.
A copy of the press release issued on December 28, 1999
announcing the execution of the Merger Agreement is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.
Item 5. Other Events
On December 28, 1999, Jostens separately announced an internal
restructuring unrelated to the Merger. A copy of the press
release announcing the restructuring is attached as Exhibit 99.2
hereto and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
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99.1 Press release issued by Jostens on December 28,
1999 announcing the execution of the Merger
Agreement.
99.2 Press release issued by Jostens on December 28,
1999 announcing the restructuring.
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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, thereunto duly authorized.
JOSTENS, INC.
Registrant
Date: January 5, 2000 By /s/ William N. Priesmeyer
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William N. Priesmeyer
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
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99.1 Press release issued by Jostens on December 28, 1999 announcing
the execution of the Merger Agreement.
99.2 Press release issued by Jostens on December 28, 1999 announcing
the restructuring.
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Exhibit 99.1
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Contacts: Heide Erickson, Jostens - 612/830-3332
FOR IMMEDIATE RELEASE Todd Fogarty or Jim Fingeroth, Kekst &
Co., for Investcorp - 212/521-4800
INVESTCORP TO ACQUIRE JOSTENS
IN $950 MILLION MERGER
Jostens Shareholders to Receive $25.25 Cash Per Share
MINNEAPOLIS and NEW YORK (December 28, 1999) - Jostens Inc. (NYSE: JOS)
will be merged into a company controlled by Investcorp, a global investment
group, and certain other international co-investors under a definitive agreement
announced today by the two companies. The transaction is valued at about $950
million, including the assumption of approximately $100 million in debt.
Under the terms of the agreement, which was approved last night by the
Jostens board of directors, Jostens shareholders will receive $25.25 per share
in cash for approximately 98 percent of the company's outstanding shares; the
remaining approximately 2 percent of the outstanding shares will constitute
approximately 6 percent of the post-merger equity. Jostens stock closed
yesterday at $18.31.
Jostens is the nation's leading marketer of commemorative school products
and services. The company's products include yearbooks, class rings, graduation
products, school photography, achievement awards, and products for athletic
champions and their fans. Jostens had sales of $769 million in the 12 months
ended Oct. 2.
Following the merger, Jostens will be 94 percent owned by Investcorp and
other international co-investors; DB Capital Partners, an affiliate of Deutsche
Bank; and Jostens senior management.
Completion of the transaction is subject to customary closing conditions,
including approval by the shareholders of Jostens and the receipt of financing.
An affiliate of Investcorp has obtained financing commitments from Deutsche Bank
AG, Chase Securities, Goldman, Sachs & Co., and Warburg Dillon Read, subject to
customary closing conditions.
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INVESTCORP TO ACQUIRE JOSTENS, page 2
The companies said they expect Jostens shareholders to vote on the proposed
merger in about 90 days, with the transaction to be completed immediately
thereafter.
"We are very excited to have the opportunity to invest in the leader in
school-related affinity products and services," said Charles J. Philippin, a
member of Investcorp's Management Committee. "Jostens is led by a fine
management team and we are pleased to invest in its growth strategy. The company
has excellent core capabilities, including a network of experienced sales
representatives, to provide the highest-quality products and services to
schools, students, parents and corporations."
Jostens will keep its headquarters in suburban Minneapolis and present
management will continue to lead the company in focusing growth efforts on the
school market.
"Investcorp has an outstanding track record of investing in strong
companies, and we look forward to working with them," said Robert C. Buhrmaster,
Jostens chairman, president and chief executive officer.
"This transaction is good news for our shareholders and customers," he
said. "Shareholders benefit by receiving a premium of almost 40 percent above
the recent share price. Customers benefit as we continue to expand our strong
school-market presence with new products and services."
Separately, the company recently completed an analysis of its organization
and lines of business. As a result, some organizational changes, job
reassignments and perhaps 100 position reductions are expected. Jostens has
approximately 6,500 employees. Details will be announced later today.
"Going forward, in contrast with a number of other mergers, the transaction
with Investcorp represents an opportunity to re-focus on growth. We do not
anticipate job reductions as a result of the merger," Buhrmaster said.
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INVESTCORP TO ACQUIRE JOSTENS, page 3
A special committee of non-employee directors negotiated the transaction
for Jostens. The full board reviewed the transaction and approved it last night.
Credit Suisse First Boston is acting as financial adviser to Jostens and issued
a fairness opinion to its board. Goldman, Sachs & Co. and Warburg Dillon Read
are acting as Investcorp's financial advisers on this transaction.
As part of the transaction, Jostens would pay Investcorp $19.125 million,
plus up to $5.0 million in expenses if the agreement is terminated under certain
circumstances, including a decision by Jostens to accept a more favorable
acquisition proposal.
About Investcorp
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Investcorp is a global investment group with offices in New York, London
and Bahrain. It focuses on three lines of business: corporate investment, real
estate investment and asset management. The firm has completed over 50 corporate
acquisitions with an aggregate value of approximately $14.5 billion.
In the U.S., Investcorp and its clients currently have 12 corporate
investments, including Independent Wireless One, Stratus Computer, Synthetic
Industries, Werner Holdings, NationsRent, Inc. and The William Carter Company.
Several North American investments have been listed publicly, including Prime
Service, Tiffany & Co., the Circle K Corporation, Saks Fifth Avenue and CSK
Auto. In Europe, Investcorp and its clients currently own five corporate
investments: Avecia (formerly AstraZeneca Specialty Chemicals), Leica
Geosystems, Polestar, Welcome Break and Helly Hansen. Additional information
about Investcorp may be found at www.investcorp.com.
Additional information about Jostens may be found at www.Jostens.com.
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Exhibit 99.2
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FOR IMMEDIATE RELEASE
Contacts: Heide Erickson, Investors (612-830-3332)
Kevin Whalen, Media (612-841-6259)
JOSTENS TO FOCUS GROWTH EFFORTS
ON SCHOOL BUSINESS
Organizational Changes Expected to Result in
$20 Million Pre-tax, Nonrecurring Charge
MINNEAPOLIS, Dec. 28, 1999 - Jostens Inc. (NYSE: JOS) said today that it is
aligning its organization to spur growth in its school-based business segment,
following a period of internally focused infrastructure improvement. To complete
that alignment, the company said its fourth-quarter results are expected to
include a nonrecurring charge of about $20 million pre-tax, or $13.2 million and
40 cents per diluted share after tax.
Excluding the nonrecurring charge, the company continues to expect to
report earning per diluted share between $1.55 and $1.65 for the full year.
Included in the nonrecurring charge are costs to eliminate about 100
full-time positions, from all levels of employment, primarily in corporate staff
functions. Those reductions include the positions of chief operating officer,
vice president of consumer marketing and channel development and two vice
presidents.
"These actions will return our cost structure to a more normalized level,
create a clear organizational focus on our school business and streamline our
organization to enable quicker, more nimble decision-making," said Robert C.
Buhrmaster, chairman, president and chief executive officer.
The company said it is exploring strategic alternatives, including
partnerships and alliances for its Recognition segment, which provides companies
with programs to recognize employee service. Recognition represented about 13
percent of Jostens' overall sales last year.
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Jostens to Focus Growth Efforts/Page 2
Separately, the company announced today that it has reached a definitive
agreement to be acquired by a company controlled by Investcorp, a global
investment group. The nonrecurring charge is related to the company's ongoing
business plans and is not related to the Investcorp transaction.
Nonrecurring Charge
The nonrecurring charge will cover the following actions:
o Eliminating about 100 full-time positions, primarily in corporate
staff functions, that had been devoted to now-completed
infrastructure projects. About $4.9 million of the pre-tax charge
is for expected separation costs.
o Exiting the internal direct mail activity to college alumni, a
unit called Jostens Direct, that had 1998 sales of $7 million.
The company will continue to service the college alumni market in
other ways. This step will result in a write off of $4 million
pre-tax in goodwill.
o Writing off $6.5 million pre-tax in development work primarily
for account and product configurator software that will not be
put into service; and
o Writing off about $4.6 million of goodwill associated with the
company's 1997 purchase of a retail class ring line. Retail
outlets will continue to be an important market for Jostens, but
new product introductions will be more focused. In 1998, retail
channel sales were about $7 million.
The company said its actions covered by the charge are expected to reduce
ongoing general and administrative costs by about $8.5 million pre-tax a year,
starting in 2000.
"The fundamentals of our business are excellent, and we are concluding a
good fall season," Buhrmaster said. "As we enter 2000, our infrastructure is
solid and we have reaffirmed that our most valuable growth opportunities reside
in the school-based market -- the market we know best. The changes we're
announcing today will enable us to drive our company forward in positive and
exciting ways."
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Jostens to Focus Growth Efforts/Page 3
Jostens is a leading provider of products, programs and services that help
people celebrate important moments, recognize achievements and build
affiliations. The company's products include yearbooks, class rings, graduation
products, school photography, achievement awards, and products for athletic
champions and their fans. Jostens had 1998 sales of $771 million.
Certain information in this news release does not relate to historical
financial information and may be deemed to constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties that could cause the
company's actual results in the future to differ materially from its historical
results and those presently anticipated or projected.
Among these risks and uncertainties are general economic conditions,
especially during peak buying seasons for the company's products and services;
competitive pricing and program changes; manufacturing performance; the
company's relationship with its sales force; the company's ability to respond to
customer change orders and delivery schedules; fashion and demographic trends;
the company's ability to control costs; to attract and retain high-quality
employees; and the company's ability to maintain its customer base and finalize
significant transactions. Other factors that could cause the company's results
to differ materially from those contained in its forward-looking statements are
included in the Jostens Annual Report on Form 10-K for 1998 and other documents
recently filed by the company with the Securities and Exchange Commission.
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