<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
SCHEDULE TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1) of the Securities
Exchange Act of 1934
------------------------
BI, INCORPORATED
(Name of Subject Company)
KBII Acquisition Company, Inc.
a wholly owned subsidiary of
KBII Holdings, Inc.
(Offerors)
(Names of Filing Persons)
Common Stock, No Par Value Per Share
(Title of Class of Securities)
------------------------
055467203
(CUSIP Number of Class of Securities)
Christopher Locovara
111 Radio Circle
Mount Kisco, New York 10549
Telephone (914) 241-7430
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of filing persons)
WITH COPIES TO:
Gregory K. Gale, Esq.
600 Peachtree Street, N.E.
Atlanta, GA 30308-2216
Telephone (404) 888-4000
Calculation of Filing Fee
--------------------------------------------------------------------------------
Transaction Valuation: Amount of filing fee:
N/A N/A
--------------------------------------------------------------------------------
[_] Check box if any part of the fee is offset as provided by Rule 0-11
(a) (2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
[X] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party offer subject to rule 14d-1
[_] issuer tender offer subject to Rule 13e-4.
[_] going-private transactions subject to Rule 13e-3.
[_] amendment to Schedule 13D under Rule 13d-2
Check the following box if the filing is a final amendment reposting the results
of the tender offer: [_]
<PAGE>
BI Enters Merger Agreement with Kohlberg & Company, L.L.C.
BOULDER, Colo., Aug. 11 /PRNewswire/ -- BI Incorporated (Nasdaq: BIAC), a
leading provider of integrated technology systems and treatment services for
community-based corrections, today announced that it has entered into a
definitive merger agreement providing for the acquisition of the Company by an
investor group led by Kohlberg & Company, L.L.C., a private merchant banking
firm with offices in Mount Kisco, N.Y. and Palo Alto, Calif. Under the terms of
the merger agreement, KBII Acquisition Company, a company formed by the investor
group, will acquire all the outstanding shares of common stock of the Company
for $8.25 per share in cash, for a total transaction cost of approximately $85
million including the assumption of debt. Under the terms of the merger
agreement, KBII Acquisition Company will commence as promptly as practicable a
tender offer for all the outstanding shares of common stock of the Company. KBII
Acquisition Company has received executed commitment letters, subject to certain
customary provisions, which provide for sufficient funds to consummate the
transactions.
The Company's Board of Directors has unanimously approved the agreement after
receiving the unanimous recommendation of a Special Committee of independent
members of the Board which had been formed to consider the proposal and intends
to recommend to the Company's shareholders that they tender their shares. The
Board has exempted the transaction from its rights plan. SunTrust Equitable
Securities has rendered to the Special Committee of the Board of Directors its
opinion, that the consideration to be paid to the holders of the Company's
common stock is fair from a financial point of view.
Jeremy Kendall, Chairman of the Company's Board of Directors, stated, "I am
pleased that the process of seeking to improve shareholder value has resulted in
a transaction with a price that reflects a premium of over 100% to the recent
closing price of our stock."
David Hunter, President of the Company, noted: "All of us in the management of
BI are pleased that the Company will continue as an independent entity with 100%
of its focus in corrections. Our new association with Kohlberg & Company affords
us a tremendous opportunity to continue, and indeed expand the relationships we
have with our customers and to increase our business internally and externally."
Certain information above contains forward-looking statements that involve risk
and uncertainties as defined in the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Management believes that its
expectations are based on reasonable assumptions. However, no assurances can be
given that its goals will be achieved and investors are cautioned that such
forward-looking statements involve risk and uncertainties. It should be noted
that the earnings history of the Company has not been consistent year to year.
Factors that could cause actual results to differ materially include, but are
not limited to: fluctuations due to timing of award of government contracts;
pricing pressures; change in federal, state and local regulations; liability in
excess of insurance coverage; new product introductions by competitors or
unexpected delays of new product introductions by the Company; raw material
availability; changes in telecommunications regulations or technologies; or the
loss of a material contract through lack of appropriations or otherwise.
Moreover, other risk factors described in the Company's period filings with the
Securities and Exchange Commission could cause actual results to differ from
those anticipated in forward-looking statements contained herein.
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares of the Company. At the time the offer is commenced, the acquiring
entity will file a tender offer statement and the company will file a
solicitation/recommendation statement with the U.S. Securities and Exchange
Commission with respect to the offer. The tender offer statement (including an
offer to purchase, a related letter of transmittal and other offer documents)
and the solicitation/recommendation statement will contain important information
which should be read carefully before any decision is made with respect to the
offer. The offer to purchase, the related letter of transmittal and certain
other offer documents, as well as the solicitation/recommendation statement,
will be made available to all shareholders of the Company, at no expense to
them. The tender offer statement (including the offer to purchase, the related
letter of transmittal and all other offer documents filed with the Commission)
and the solicitation/recommendation statement will also be available at no
charge at the Commission's website at www.sec.gov.
For more information on BI Incorporated via facsimile at no cost, simply dial 1-
800-PRO-INFO and enter the Company symbol BIAC, or visit BI's website at
www.bi.com.
CONTACT: Jackie Chamberlin, Chief Financial Officer, 303-218-1000, or David
Hunter, President & CEO, 303-218-1000, of BI Incorporated
07:45 EDT
2
<PAGE>
Signature
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: August 11, 2000 KBII Acquisition Company, Inc.
By: /s/ Christopher Lacovara
-------------------------
Christopher Lacovara
Secretary
KBII Holdings, Inc.
By: /s/ Christopher Lacovara
-------------------------
Christopher Lacovara
Secretary
3
