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: June 4, 1997
WESTERN MICRO TECHNOLOGY, INC.
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(Exact name of registrant as specified in its charter)
California 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 5. Other Events.
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On June 4, 1997, Western Micro Technology, Inc. issued the press release
attached hereto as Exhibit 99.1 and incorporated by reference.
Item 7. Financial Statements and Exhibits.
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(a) Exhibits.
99.1 Press Release dated June 4, 1997.
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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: June 4, 1997
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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99.1 Press Release dated June 4, 1997.
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For more information contact:
P. Scott Munro Sandra M. Salah
President and CEO Vice President, Corporate Relations
Western Micro Technology, Inc. Western Micro Technology, Inc.
408-341-4767 408-341-4712
[email protected] [email protected]
WESTERN MICRO EXPANDS IBM MIDRANGE BUSINESS;
ANNOUNCES AGREEMENT TO ACQUIRE
STAR MANAGEMENT SERVICES DISTRIBUTION BUSINESS
Campbell, California, June 4, 1997 -- Western Micro Technology, Inc. (Nasdaq
National Market - WSTM), a leading midrange systems distributor, announced today
that it has signed a definitive agreement to acquire all of the stock of Star
Management Services, Inc. Star Management Services, Inc. ("Star Companies") is
the holding company for a family of companies which operate as a value-added
distributor for high technology midrange solutions in the IBM AS/400* and
RS/6000* systems market. The Star Companies are as follows: Sirius Computer
Solutions ("Sirius"), a leading distributor for the IBM AS/400 and RS/6000
midrange platforms, and for Telxon wireless radio frequency technology products;
Star Data Systems ("Star"), a distributor for IBM midrange parts and
peripherals; and I-Net Systems ("I-Net"), a developer of Internet solutions for
midrange systems resellers. Sirius also sells to end user customers as a
Solution Provider for IBM. Prior to closing, this segment of the business will
be spun off as a separate unaffiliated company.
The total consideration to be paid for the Company is $45M in cash combined with
510,714 shares of Western Micro common stock issued at closing. This
consideration is to be paid as follows: $30M cash at closing, with two
subsequent payments of $7.5M of the first and second anniversaries of the
closing. In addition, the shareholders of Star Management Services will be paid
$5M in cash based upon the attainment of certain performance goals. The
acquisition is subject to, among other things, Western Micro obtaining necessary
financing and government approval of a Hart-Scott-Rodino anti-trust filing. The
transaction is expected to close in July, 1997.
"This transaction will represent the largest acquisition for the Company to
date," said Scott Munro, President and CEO of Western Micro. "We expect this
will be a great marriage for both companies. Star Companies' strengths are in
the AS/400 and wireless technology arena, coupled with leasing and service
capability, while Western Micro's focus is in the RS/6000, RS/6000 Scaleable
POWERparallel* UNIX market and the midrange systems integration business. Star
Companies have built a reputation by providing in-depth product expertise,
outstanding support and professional services to its customer base. We believe
that they are clearly one of the foremost IBM distributors in the country."
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"By melding the two organizations, we expect to create one of the most dominant
midrange systems distributors in the country, and certainly one of IBM's largest
distributors," Munro continued.
"We're very excited to join forces with Western Micro," commented Joe Mertens,
Executive Vice President of Star Companies. "Western Micro excels in offering
total solutions in the RS/6000 environment. They have a team of dedicated sales
and support specialists who provide a host of products, programs and technical
services to make their customers successful. Their business model represents a
strong commitment to their customers, which mirrors our strategy. Merging the
two companies should leverage the strengths of both companies. This is a
combination in which both of our customer sets will benefit."
Fred Tufts, Director of Channel Management and Strategy, IBM North America, said
the reseller channel continues to see robust growth in the midrange systems
market. "Western Micro and Star Companies have an established track record of
providing exceptional customer service and support; their success is
demonstrated through the growth that they have experienced," said Tufts. "The
merger should enhance the IBM value-added channel strategy."
Both Western Micro and Star Companies are IBM Premier Business Partners. This
status is granted by IBM, and recognizes those Business Partners which achieve
overall excellence in revenue performance, customer satisfaction, quality, and
overall business results. Western Micro was also awarded certification in IBM's
Authorized Assembler Program for RS/6000 UNIX workstations and entry level
servers. This enables the Company to provide systems built in-house to meet
specific customer configuration requirements and deliver quality solutions in a
fast, efficient manner. Western Micro was recently granted ISO9002 certification
as well.
Upon closing, Western Micro will merge its IBM distribution operation with Star
Companies and form a new subsidiary for the combined IBM midrange business. Joe
Mertens will be the President and CEO of this business. For the first six
months, each organization will continue to manage their own customer base while
leveraging the resources that may be synergistic (i.e. technical support, value
added services, warehousing, leasing, and technical integration under the
RS/6000 Authorized Assembler Program). Reporting to Joe Mertens will be Terry
Johnson, Vice President and CFO, Carolyn Wesson, Vice President of Operations,
and Vice Presidents Fred Cuen and Jim Teter who will be responsible for the
Sales and Marketing efforts of the Western Micro and Star Companies customer
bases, respectively.
The new subsidiary will be headquartered in San Antonio and have a new name
prior to close. This new organization will bring together a workforce of over
180 employees dedicated to IBM, with more than 20 employees in technical support
and services.
Western Micro distributes a full line of IBM products, including RS/6000,
RS/6000 SP, AS/400 Advanced Series, PC's and ThinkPads*, Software (ADSM, Lotus
Notes, DB2, Tivoli, Internet), Storage, Networking and Printers. Star Companies
will add a number of leading hardware and software solutions to Western Micro's
offerings. These include Motorola and Telxon networking and wireless products,
as well as Internet solutions for the AS/400.
Western Micro Technology is an innovative, value-added distributor providing
solutions, sales and services to VARs, System Integrators and OEMs. Western
Micro excels as the distributor of choice of the sophisticated, high-level VARs
who insist on working with the best products supported by top-notch technical
and marketing professionals. Leading manufacturers such as
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IBM, NCR, Data General, Unisys and SCO have established strong business
relationships with Western Micro. In turn, Western Micro provides its customers
with the dedicated sales, marketing, financial and technical capabilities
necessary to support these world class product lines. For further information,
visit our web site at www.westernmicro.com.
Star Management Services is the holding company for Sirius Computer Solutions,
Star Data Systems, and I-Net Systems. This family of companies acts as a
value-added distributor for high technology midrange solutions in the IBM AS/400
and RS/6000 systems market. By focusing on midrange servers, wireless
technology, networking, data communications, and Internet products, Star
provides its Solution Providers with the products and technologies they need to
be successful. Star supports its Solution Providers with technical configuration
assistance, financing, marketing, and Internet support. For further information,
visit the Star web site at www.sirius-mir.com.
When used in this disclosure, the words "estimate", "project", "intend",
"expect" and similar expressions are used to identify forward-looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially. For a discussion of certain of such
risks, see "Factors Affecting Future Results" contained within the Company's
documents filed quarterly with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. There can be no assurances that the
transaction described above will be completed since it is subject to a number of
contingencies. The Company undertakes no obligation to publicly release updates
or revisions to these statements.
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Western Micro Technology, Western Micro, and the Western Micro logo are
registered trademarks of Western Micro Technology, Inc. IBM AS/400, RS/6000,
RS/6000 Scaleable POWERparallel, and ThinkPads are trademarks or registered
trademarks of International Business Machine Corporation. All other company
and/or product names are respective property of their prospective holders and
should be treated as such.
