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): August 10, 1999
STRATEGIA CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky 0-21662 61-1064606
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
6040 Dutchmans Lane, Suite 400
Louisville, Kentucky 40205-3271
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 426-3434
(Former name or former address, if changed since last report.)
Item 5. Other Events
On August 10, 1999, Strategia Corporation ("Strategia") entered into a
definitive agreement to sell its French subsidiaries to a subsidiary of
Guardian iT plc ("Guardian"), a United Kingdom based disaster recovery
company. Net proceeds to Strategia from the sale are estimated to be $5.8
million based upon the combined balance sheets of the French subsidiaries at
December 31, 1998. This would result in an estimated gain to Strategia of
approximately $3.6 million. There will be an adjustment to the purchase
price based on the change in the French subsidiaries combined net asset value
between December 31, 1998, and the closing date. It is expected that this
will result in an increase in the net cash proceeds to the Registrant. Of
the total cash consideration, $1,275 thousand will be paid into an escrow
account at closing to support any potential warranty claims that the
purchaser may subsequently have against Strategia. Subject to deductions,
$637.5 thousand will be released from the escrow account on March 31, 2000
and the remaining $637.5 thousand on September 30, 2000.
Strategia is disposing of its investment in three French subsidiaries by
selling the shares of stock owned in each company. The three subsidiaries
are Twinsys Dataguard S.A. ("Twinsys"), Twin-X S.A. ("Twin-X"), and Strategia
Europe S.A.S. ("Strategia Europe"). Twinsys and Strategia Europe are 100%
owned by the Registrant and Twin-X is 60% owned by Twinsys. As part of the
transaction, Strategia or Twinsys will purchase the 40% minority interest in
Twin-X from the minority shareholders in order to be able to sell 100% of
each of the three subsidiaries to Guardian. Combined net assets of the
French subsidiaries at December 31, 1998, were $2.2 million.
Consummation of the transaction is subject to approval of Strategia's
stockholders and other customary conditions. The transaction is expected to
be completed in the fourth quarter of 1999.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit 99.1 - Press Release dated August 10, 1999
SIGNATURES
In accordance with 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.
STRATEGIA CORPORATION
August 23, 1999 /s/ Richard W. Smith
Date Richard W. Smith
President
Exhibit 99.1
STRATEGIA CORPORATION ANNOUNCES SALE OF FRENCH SUBSIDIARIES
August 10, 1999 - Louisville, KY - Strategia Corporation (SAA: AMEX)
announced today the company has entered into a definitive agreement to sell
its French businesses to Guardian iT plc, a U.K.- based disaster recovery
company.
Net proceeds to Strategia from the sale, which are based on the French
companies' combined balance sheet at December 31, 1998, are estimated to be
$5.8 million. This represents an estimated gain to the company of $3.6
million. An adjustment to the purchase price based on the change in the
companies' combined net asset value at the closing is expected to increase
the net proceeds. The transaction is expected to close in the fourth quarter
and is subject to a number of conditions being met, including approval by
Strategia shareholders.
Richard W. Smith, President of Strategia Corporation, stated:
"The sale of our French businesses is timely. Recently, there has been a
great deal of consolidation in the European disaster recovery market. This
would have made competition against the resulting larger firms more
difficult. At the same time, the trend allowed us to receive what we
consider to be an attractive price for our French operations. In addition,
the sale will allow us to focus our management resources more intensely on
our U. S. business as we transition away from Year 2000 services."
The above discussion contains forward looking statements. Management
cautions that all statements as to future results, including statements
relating to the sale described above, are necessarily subject to risks,
uncertainties, and events that may be beyond the control of Strategia, and no
assurance can be given that the results anticipated above will be achieved.
Potential risks and uncertainties include the risk that the transaction will
not be consummated or that it will be subject to terms and conditions that
may result in the benefits of the transaction being less than anticipated.
Contact: Murdock Capital Partners Corp.
(212) 421-2545
Thomas M. Dean
Luis J. Mejia
