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) December 18, 1997
ELCOTEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-15205 59-2518405
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
6428 Parkland Drive, Sarasota, Florida 34243
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(Address of principal executive offices) (Zip Code)
(941) 758-0389
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(Registrant's telephone number, including area code)
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ITEM 2. Acquisition or Disposition of Assets.
On December 18, 1997, Elcotel, Inc. (the "Company"), a Delaware
corporation, acquired Technology Service Group, Inc. ("TSG"), a Delaware
corporation, via the merger (the "Merger") of Elcotel Hospitality Services, Inc.
("EHS"), a wholly owned subsidiary of the Company, into TSG, pursuant to the
Agreement and Plan of Merger dated as of August 13, 1997 (as amended) among the
Company, TSG and EHS ("Merger Agreement"). Immediately following the
consummation of the Merger, TSG became a wholly owned subsidiary of the
Company. Pursuant to the Merger Agreement each issued and outstanding share
of common stock of TSG was converted into the right to receive 1.05 shares of
common stock of the Company and in accordance with this formula, received an
aggregate of 4,944,292 shares of common stock of the Company. In addition, as
a result of the Merger, holders of options and rights to purchase shares of
common stock of TSG pursuant to TSG's option and stock purchase plans received
options and rights to purchase, at a proportionately reduced per share exercise
price, a number of shares of common stock of the Company equal to 1.05 times
the number of shares of common stock of TSG they were entitled to purchase
immediately prior to the Merger under such options and rights. Similarly,
holders of warrants to purchase shares of common stock of TSG received warrants
to purchase, at a proportionately reduced per share exercise price, a number of
shares of common stock of the Company equal to 1.05 times the number of shares
of common stock of TSG they were entitled to purchase immediately prior to the
Merger under such warrants. The terms of the Merger Agreement were the result
of arm's length negotiations.
A copy of the press release regarding the consummation of the Merger
issued by the Company is attached hereto as Exhibit 99.1. The description of
the terms of the Merger set forth above is qualified in all respects by
reference to the Merger Agreement which is attached as an exhibit hereto and
is incorporated herein by reference.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired
The financial statements of TSG, the business acquired, required to
be filed are not attached to this Form 8-K and will be filed by amendment not
later than 60 days after the date that this Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information of TSG, the business acquired,
required to be filed are not attached to this Form 8-K and will be filed by
amendment not later than 60 days after the date that this Form 8-K is required
to be filed.
(c) Exhibits
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Exhibit Number Description
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2.1 Merger Agreement (incorporated by reference to Appendix A to
the Joint Proxy Statement-Prospectus included in the Company's
Registration Statement on Form S-4, File No. 333-38439)
2.2 Amendment No. 1 dated as of September 30, 1997 to the Merger
Agreement (incorporated by reference to Exhibit 2.4 to the
Company's Registration Statement on Form S-4, File
No. 333-38439)
2.3 Form of Stockholders' Agreement among the Company, Wexford
Partners Fund, L.P. and Fundamental Management Corporation
(incorporated by reference to Exhibit 2.3 to the Company's
Registration Statement on Form S-4, File No. 333-38439)
99.1 Press release regarding the consummation of the Merger issued
by the Company on December 18, 1997
,
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.
Date: December 24, 1997
ELCOTEL, INC.
By: /s/ Ronald M. Tobin
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Ronald M. Tobin
Vice President and Chief
Financial Officer
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Tracey L. Gray
December 18, 1997 President & COO
Elcotel, Inc.
(941) 758-0389
Frank Petras
Investor Relations
SM Berger & Co.
(216) 464-6400
Elcotel and Technology Service Group Complete Merger
SARASOTA, Fla., Dec. 18 /PRNewswire/ -- Elcotel, Inc., (Nasdaq: ECTL -
news) announced today the closing of its merger with Technology Service
Group, Inc. (Nasdaq: TSGI - news) via one of its wholly owned subsidiaries.
As previously announced, the merger was approved by the shareholders of
both companies at meetings held on December 5, 1997.
Elcotel is the leader in sales of microprocessor-based ``intelligent''
payphones and network management systems to domestic private payphone
operators. TSG is the leading provider of microprocessor-based intelligent
payphones and network management systems to the regulated public telephone
companies, a customer group Elcotel has recently begun serving. Both
companies have been successful in developing international programs, TSG
with wireless card-only products and Elcotel with wireline card and coin
products.
At Elcotel's December 5 shareholder meeting, company chairman C. Shelton
James noted that the merger is the culmination of a strategic initiative on
the part of both TSG and Elcotel to diversify their businesses and
establish a strong presence in the two domestic public communications
markets represented by the regulated telephone company payphone operations
and the independent private payphone operations. Mr. James also noted that
the merger brought together complementary coin, card, wireline, and
wireless payphone technologies to address rapidly expanding international
markets.
``This merger positions Elcotel to take advantage of growing domestic and
international public telecommunications market opportunities,'' Mr. James
said. ``We are very pleased with this merger and continue to find ways to
streamline the combined business organizations and establish synergy.''
According to Elcotel's president Tracey Gray, the markets, products,
services, and operational strengths of the two companies should mesh
together nicely: ``The merger brings together two strong industry players
that complement each other in markets, products, services, and operational
strengths. Elcotel is now in a better position to take advantage of growth
opportunities opened up by the 1996 Telecommunications Reform Act in the
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domestic markets and by the worldwide privatization initiatives that are
driving demand for new technology and new suppliers in the rapidly
expanding international public communications services sector. Expenditures
of approximately $2 billion are planned on wireline, wireless and
smart-card applications in countries around the world over the next three
years. With a strengthened position in domestic markets and growing success
in international markets, Elcotel today is a strong and aggressive
competitor that should be able to create value for its customers,
employees, and shareholders.''
The company also announced that Vincent Bisceglia, TSG's president and
chief executive officer, has decided for personal reasons not to accept a
management position with Elcotel, so that he can pursue other career
opportunities and business interests. Over the next few months, however, he
will assist Elcotel as a consultant with transition issues associated with
the merger.
``Mr. Bisceglia's excellent talents and capabilities were of great service
in making this merger effective,'' Mr. James said. ``We wish him well in
his new ventures and look forward to having his counsel as our integration
efforts get underway.''
Elcotel, Inc., based in Sarasota, Florida, designs, develops, manufactures,
and markets reliable microprocessor-based public communication products and
software that provide service over both domestic and international wireline
and wireless telephone networks. Elcotel is the leader in sales of
microprocessor-based payphone products to domestic private payphone
operators. The addition of TSG brings together complementary coin, card,
wireline, and wireless payphone technologies that put Elcotel in a unique
position to provide complete public communications solutions for its
domestic and international markets.
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Statements contained in this release that are not historical facts may
contain forward-looking information with respect to the company's plans,
projections, or future performance, which involve certain risks and
uncertainties that could cause the company's actual results to differ
materially from those expected by the company. These risks and
uncertainties include the risk of adverse regulatory action affecting the
company's business or the business of the company's customers, the risk of
competition, the risk of obsolescence of the company's products, and other
uncertainties detailed in the company's filings with the Securities and
Exchange Commission.
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