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: September 30, 1997
WESTERN MICRO TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-11560 94-2414428
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
254 East Hacienda Avenue, Campbell, CA 95008
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(Address of principal executive offices) (Zip Code)
(408) 379-0177
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(Registrant's telephone number,
including area code)
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Item 2. Acquisition or Disposition of Assets.
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On June 4, 1997, Western Micro Technology, Inc. (the "Registrant")
entered into a definitive Stock Purchase Agreement by and among the Registrant,
Star Management Services, Inc., a Delaware corporation ("Star Management")
Harvey E. Najim and Carlton Joseph Mertens II (together, the "Selling
Stockholders") attached hereto as Exhibit 2.1 (the "Stock Purchase Agreement").
As a result of the Stock Purchase Agreement, the Registrant would acquire the
mid-range computer systems distribution business ("Star") of Star Management
Services, Inc. (the "Star Acquisition"). Star Management Services is a holding
company for a family of companies, including Star Data Systems, Inc. and Sirius
Computer Solutions ("Sirius Computer"), a value-added distributor for high
technology mid-range solutions in the IBM AS/400 and RS/6000 systems market.
Sirius Computer also sells directly to end-user customers as an Industry
Remarketer ("IR") for IBM (the "Sirius End-user Business"). Prior to the closing
of the Star Acquisition (the "Closing"), Star Management Services completed a
spin-off of the Sirius End-user Business as a separate unaffiliated company. As
used in this Report, "Star" refers to the business of Star Management Services
following the spin-off of the Sirius End-user Business.
On September 30, 1997, the Registrant executed an amendment, attached
hereto as Exhibit 2.2, (the "Third Amendment"), with the Selling Stockholders
modifying certain terms of the Stock Purchase Agreement. The Third Amendment
superseded in their entirety the Letter Agreement dated July 22, 1997, the
Amendment to Stock Purchase Agreement dated August 29, 1997 (filed as Exhibit
2.1 to the Registrant's Current Report on Form 8-K filed on September 15, 1997)
and the Second Amendment to Stock Purchase Agreement dated September 5, 1997
(filed as Exhibit 2.2 to the Registrant's Current Report on Form 8-K filed on
September 15, 1997). The Third Amendment was signed concurrently with the
Closing.
The Closing of the Star Acquisition occurred on September 30, 1997. As
consideration for the Stock Purchase Agreement, the Selling Stockholders
received an aggregate of $38,912,000 in cash at Closing combined with 460,000
shares of Western Micro common stock. Additional payments of $3,675,000 are to
be paid on each of the first and the second anniversaries of the Closing. An
additional $5 million is to be paid based on achieving certain performance
goals. Upon the Closing, Star was renamed Business Partner Solutions, Inc.-TM-
Business Partner Solutions, Inc.-TM- is a wholly owned subsidiary of the
Registrant.
Also pursuant to the Star Acquisition, Carlton Joseph Mertens II was
elected to the Registrant's board of directors. Mr. Mertens is also the
beneficial owner of 460,000 shares of the Registrant's common stock received as
part of his consideration under the terms of the Stock Purchase Agreement, as
amended.
In addition to funds of the Registrant and the Registrant's common
stock, the Registrant used funds from the following two sources to finance the
Star Acquisition:
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(a) The Registrant entered into a Note Purchase Agreement, attached
hereto as exhibit 4.1, by and among: (i) the Registrant, as issuer; (ii) WMT
Acquisition Corp., a Delaware corporation, Savoir Technology Group, Inc., a
Delaware corporation, Star Management, Inet Systems, Inc., a Texas corporation,
Star Data International, a company organized under the laws of the Virgin
Islands, Sirius Investments, Inc., a Nevada corporation and Star Data Systems, a
Texas corporation, as guarantors (together, the "Guarantors"); (iii) Robert
Fleming Inc., a Delaware corporation and Canpartners Investments IV, LLC, a
California limited liability company, as purchasers (together, the
"Purchasers"); and (iv) Canpartners Investments IV, LLC, as agent for the
Purchasers (the "Agent"). Pursuant to the Note Purchase Agreement, the
Registrant sold Fifteen Million Seven Hundred Thousand Dollars ($15,700,000)
worth of secured notes (the "Notes") to the Purchasers, granted to the
Purchasers warrants to purchase Four Hundred Thousand (400,000) shares of the
Registrant's common stock, and granted to the Purchasers Ten (10) shares of
newly authorized and issued Series B Preferred Stock with the right to elect a
member of the Board of Directors in the event of a default by the Registrant on
the Notes.
(b) The Registrant executed the Amendment #4 to the Inventory and
Working Capital Financing Agreement between the Registrant and IBM Credit
Corporation, a Delaware corporation ("ICC"), attached hereto as Exhibit 10.1
(the "Amendment #4 to Western IWCF"), to that certain Inventory and Working
Capital Financing Agreement, as amended on December 31, 1996 (the "Western
IWCF") among the Registrant and ICC (filed as Exhibit 10.23 to the Registrant's
Annual Report on Form 10-K filed on March 31, 1997). Pursuant to the Amendment
#4 to Western IWCF, the Registrant obtained an additional loan of Ten Million
Dollars ($10,000,000) to consummate the Star Acquisition and granted to ICC a
warrant to purchase One Hundred Thousand (100,000) shares of the Registrant's
common stock.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of business acquired.
Financial statements of the acquired business required by this
Item 7(a) will be filed as soon as practicable, and not later
than December 14, 1997.
(b) Pro forma financial information.
Pro forma financial statements required by this Item 7(b) will be
filed as soon as practicable, and not later than December 14,
1997.
(c) Exhibits.
2.1 Stock Purchase Agreement by and among the Registrant, Star
Management and the Selling Stockholders dated as of June 4,
1997, incorporated herein by reference from Exhibit 2.1 to
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Amendment No. 2 of the Registrant's Current Report on Form
8-K filed on July 16, 1997.
2.2* Third Amendment to Stock Purchase Agreement by and among the
Registrant, Star Management, Harvey Najim and Carlton Joseph
Mertens II dated September 30, 1997, incorporated herein by
reference from Exhibit 2.1 to the Registrant's Current
Report on Form 8-K filed on October 10, 1997.
4.1 Note Purchase Agreement among the Registrant, the Guarantors
and the Purchasers dated September 30, 1997, incorporated
herein by reference from Exhibit 4.1 to the Registrant's
Current Report on Form 8-K filed on October 10, 1997.
10.1 Amendment #4 to the Inventory and Working Capital Financing
Agreement dated September 30, 1997, incorporated herein by
reference from Exhibit 10.6 to the Registrant's Current
Report on Form 8-K filed on October 10, 1997.
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* Confidential Treatment requested pursuant to a request for confidential
treatment filed with the Commission on October 10, 1997. The portions of the
exhibit for which confidential treatment has been requested have been omitted
from the exhibit. The omitted information has been filed separately with the
Commission as part of the confidential treatment request.
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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 hereunto duly authorized.
Dated: October 15, 1995
WESTERN MICRO TECHNOLOGY, INC.
By /s/ James W. Dorst
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James W. Dorst
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Stock Purchase Agreement by and among the Registrant,
Star Management and the Selling Stockholders dated as
of June 4, 1997, incorporated herein by reference
from Exhibit 2.1 to Amendment No. 2 of the
Registrant's Current Report on Form 8-K filed on July
16, 1997.
2.2* Third Amendment to Stock Purchase Agreement by and
among the Registrant, Star Management, Harvey Najim
and Carlton Joseph Mertens II dated September 30,
1997, incorporated herein by reference from Exhibit
2.1 to the Registrant's Current Report on Form 8-K
filed on October 10, 1997.
4.1 Note Purchase Agreement among the Registrant, the
Guarantors and the Purchasers dated September 30,
1997, incorporated herein by reference from Exhibit
4.1 to the Registrant's Current Report on Form 8-K
filed on October 10, 1997.
10.1 Amendment #4 to the Inventory and Working Capital
Financing Agreement dated September 30, 1997,
incorporated herein by reference from Exhibit 10.6 to
the Registrant's Current Report on Form 8-K filed on
October 10, 1997.
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* Confidential Treatment requested pursuant to a request for confidential
treatment filed with the Commission on October 10, 1997. The portions of the
exhibit for which confidential treatment has been requested have been omitted
from the exhibit. The omitted information has been filed separately with the
Commission as part of the confidential treatment request.
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