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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): April 9, 1998
(April 7, 1998)
ATC COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2050538
(State of Incorporation) (I.R.S. Employer
Identification No.)
5950 BERKSHIRE LANE, SUITE 1650, DALLAS, TEXAS 75225
(Address of principal executive offices, Zip Code)
Registrant's telephone number, including area code: (214) 361-9870
This Form 8-K consists of 9 pages. The exhibit index is on page 4.
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ITEM 5. OTHER EVENTS
On April 8, 1998, ATC Communications Group, Inc. issued the news release
attached hereto as Exhibit 99.1, which news release is incorporated herein by
this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) Exhibits
Exhibit 99.1 News release of ATC Communications Group, Inc. dated
April 8, 1998.
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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.
ATC COMMUNICATIONS GROUP, INC.
(The Registrant)
Dated: April 9, 1998 By: /s/ Matthew S. Waller
-----------------------------
Matthew S. Waller
Chief Financial Officer
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EXHIBITS INDEX
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<S> <C>
Exhibit Number Description of Exhibit
- -------------- -----------------------
Exhibit 99.1 News release of ATC Communications Group, Inc. dated
April 8, 1998.
</TABLE>
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EXHIBIT 99.1
CONTACTS AT ATC COMMUNICATIONS GROUP:
MATTHEW S. WALLER, (972) 830-1800
Chief Financial Officer
SCOTT D. GUFFEY, (972) 830-1800,
Vice President - Finance, Acquisitions and Investor Relations
CONTACTS AT IQI, INC.:
AL GIRARDI, of GCI Group, (212) 546-2208
LAURA SWYMER, of GCI Group, (212) 546-1453
ATC COMMUNICATIONS AND IQI, INC. TO CREATE TELESERVICES LEADER
IN ONE OF THE LARGEST INDUSTRY MERGERS
TRANSACTION CREATES A TOP TIER INDUSTRY LEADER;
THIRD LARGEST TELESERVICES MERGER
TWO TELESERVICE LEADERS JOIN COMPLEMENTARY OPERATIONAL STRENGTHS, ESTABLISHING
A PLATFORM FOR A VIGOROUS GROWTH STRATEGY
DALLAS AND LOS ANGELES, APRIL 8, 1998 - Dallas-based ATC Communications
Group, Inc. (NASDAQ: ATCT) and Los Angeles-based IQI, Inc., two of the
nation's leading teleservices companies, announced today a definitive
agreement for a stock-for-stock merger of the two companies. The combined
company, with an enterprise value of approximately $150 million, is the
result of the third largest merger in the industry and will create a top tier
entity. The transaction requires ATC Communications Group shareholder and
regulatory approvals, and is expected to be completed within 90 days.
The new company will offer complete, integrated marketing services including
customer acquisition, customer care, and market research to leading
corporations. On a historical pro-forma basis, the combined company's 1997
revenues were approximately $250 million. The combined company has
approximately 8,000 teleservices professionals, 6,000 workstations, and 21
call centers. The company's combined client base includes American Express,
AT&T, Bell South, First USA, Proctor & Gamble, Sears, U.S. West, Universal
Card, and Western Union.
"This merger not only dramatically increases the array of value-added
services we will provide, but also expands our core competencies so integral
to building
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ATC COMMUNICATIONS AND IQI, INC. TO CREATE TELESERVICES LEADER
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and strengthening strategic client partnerships," noted Stephen A. McNeely,
CEO of IQI and the announced CEO of the new entity. "The combined company
will provide total customer care, customer acquisition and custom market
research. By coupling this strong product portfolio with our tremendous
platform in people, information systems and facilities, we are poised to
accelerate growth. We will truly be a customer driven, innovative, growth
oriented, integrated marketing services provider."
"This merger matches a leader in inbound teleservices, ATC, with a leader in
outbound services, IQI - it's a great strategic fit that enhances the
capabilities of both companies," said Michael G. Santry, chairman and CEO of
ATC. "The strong, senior-level corporate relationships that both ATC and IQI
have with present customers will also help fuel growth in our new company."
Mr. Santry will co-chair the combined company with Dr. Paul G. Stern, a
founding partner of Thayer Capital, IQI's largest shareholder.
"Combining IQI's unique capabilities in multilingual, pay-for-performance,
and database management with ATC's information technology platform will
create a strong, strategic weapon, allowing us to quickly add new call
centers in a cost effective manner," Dr. Stern explained. "The combined
company is a powerful platform for growth."
To accomplish the merger, ATC will issue approximately 34.2 million shares of
stock in exchange for IQI's equity. IQI shareholders will own 57.5% of the
common stock after the merger and ATC shareholders will own 42.5% of the
combined company's shares. The company will continue to be traded on the
NASDAQ National Market System. CIBC Oppenheimer Corp. is acting as ATC's
financial advisor in this transaction.
New directors of the combined company will include Frederic V. Malek,
chairman of Thayer Capital and former president of Northwest Airlines and
Marriott Hotels; Drew Lewis, former chairman of Union Pacific Railroad and
Secretary of Transportation; and Peter Ueberroth, former commissioner of
baseball; as well as Mr. McNeely, Mr. Santry, and Dr. Stern.
ATC Communications Group, Inc. is a 12-year-old publicly held company. Its
operating subsidiary, ATC Communications, offers custom-developed strategic
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ATC COMMUNICATIONS AND IQI, INC. TO CREATE TELESERVICES LEADER
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sales and service applications, outsourced and facility management
operations, and traditional high-volume, transaction-based teleservices. ATC
employs over 3,500 people and has six call centers equipped with
approximately 3,200 dual mode workstations.
IQI, a pioneer in the teleservices industry since 1968, provides integrated
marketing services through its vast telemarketing resources, custom research
capabilities, database management skills and proprietary databases to give
clients an unsurpassed competitive edge in the marketplace. IQI employs more
than 4,700 people and has equipped over 2,700 workstations in 15 call centers.
IQI's Elrick & Lavidge division is recognized as one of the premier custom
market research firms in the United States. Established in 1951, Elrick &
Lavidge provides clients, representing a broad range of industries, with
customer satisfaction, quantitative, and qualitative research and marketing
services. Elrick & Lavidge's clients include American Century, Compaq, Frito
Lay, Hallmark, 3M, and Proctor & Gamble.
Thayer Capital is a private equity investment firm based in Washington D.C.
It manages Thayer Equity Investors III, a private fund raised by Thayer
partners, Frederic V. Malek, Rick Rickertsen, and Paul G. Stern. The fund's
goal is to generate superior equity returns through acquisitions of companies
where Mr. Malek and Dr. Stern have significant operating experience.
Dr. Stern served as chairman and CEO of Northern Telecom, president and COO
of Burroughs Corporation (now Unisys Corporation) and chairman and CEO of
Braun AG in Germany. Mr. Malek was president and vice chairman of Northwest
Airlines and, earlier, president of Marriott Hotels and Resorts. Mr.
Rickertsen has worked in the investment industry for 12 years and, prior to
joining Thayer, worked at Brentwood Associates and Morgan Stanley & Co.
Worldwide, teleservices spending exceeds $100 billion per year, with the U.S.
teleservices sector estimated at approximately $80 billion and growing 8-10%
annually. Outsourcing in teleservices, a core competency of the merged
firms, is growing at an even higher rate.
THE FOLLOWING IS A "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995: STATEMENTS CONTAINED IN THIS DOCUMENT THAT ARE
NOT BASED ON HISTORICAL FACTS ARE "FORWARD-LOOKING STATEMENTS". TERMS SUCH
AS "ANTICIPATES", "BELIEVES", "ESTIMATES",
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ATC COMMUNICATIONS AND IQI, INC. TO CREATE TELESERVICES LEADER
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"EXPECTS", "PLANS", "PREDICTS", "MAY", "SHOULD", "WILL", THE NEGATIVE THEREOF
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
SUCH STATEMENTS ARE BY NATURE SUBJECT TO UNCERTAINTIES AND RISKS, INCLUDING
BUT NOT LIMITED TO: APPROVAL BY REGULATORY AUTHORITIES AND THE SHAREHOLDERS
OF ATC COMMUNICATIONS GROUP, INC. AND IQI, INC. OF THE MERGER; THE
ACHIEVEMENT OF EXPECTED SYNERGIES AND BENEFITS OF COMBINATION AND
CONSOLIDATION; THE ABILITY TO INTEGRATE DISTINCT BUSINESSES AND OPERATIONS
SMOOTHLY AND TO AVOID OR MINIMIZE THE DISRUPTION CAUSED BY BUSINESS
COMBINATIONS; AND OTHER OPERATIONAL, FINANCIAL OR LEGAL RISKS OR
UNCERTAINTIES DETAILED IN THE COMPANY'S SEC FILINGS FROM TIME TO TIME.
THE OFFERING OF ATC COMMUNICATIONS GROUP, INC. COMMON STOCK TO THE
SHAREHOLDERS OF IQI, INC. IN CONNECTION WITH THE MERGER WILL BE MADE ONLY BY
MEANS OF A PROSPECTUS/PROXY STATEMENT. A REGISTRATION STATEMENT RELATING TO
THE ATC COMMUNICATIONS GROUP, INC. COMMON STOCK TO BE ISSUED TO IQI, INC.
SHAREHOLDERS WILL BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO
THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PRESS RELEASE
SHALL NOT CONSTITUTE AN OFFER TO SELL NOR THE SOLICITATION OF AN OFFER TO
BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL WITHOUT THE REGISTRATION
OR QUALIFICATION OF SUCH SECURITIES UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
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