SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 18, 1999
Synetic, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 0-17822 22-2975182
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
669 River Drive, River Drive Center II, Elmwood, New Jersey 07407
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: (201) 703-3400
Exhibit Index on Page 4
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Item 5. Other Events.
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On May 16, 1999, Synetic, Inc., a Delaware corporation
("Synetic"), and Medical Manager Corporation, a Delaware corporation ("Medical
Manager"), entered into an Agreement and Plan of Merger (the "Merger Agreement")
providing for a strategic business combination between Synetic and Medical
Manager. Under the Merger Agreement, a subsidiary of Synetic will be merged with
and into Medical Manager and Medical Manager will become a wholly-owned
subsidiary of Synetic (the "Merger"). Upon consummation of the Merger, each
outstanding share of common stock, par value $.01 per share, of Medical Manager
will be converted into the right to receive 0.625 shares of common stock, par
value $.01 per share, of Synetic, subject to a collar mechanism.
Consummation of the Merger is subject to certain conditions,
including among other things, approval of the Merger by the stockholders of
Synetic and Medical Manager, the expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and confirmation
that the Merger qualifies as a tax-free reorganization for federal income tax
purposes and that it may be accounted for as a pooling of interests transaction.
In connection with the Merger Agreement, Medical Manager
entered into stock option agreement providing Synetic an option to purchase
19.9% of Medical Manager's common stock in the event the Merger Agreement is
terminated in certain circumstances. Synetic has granted Medical Manager a
similar right with respect to 10% of Synetic's common stock.
In connection with the Merger Agreement, certain Medical
Manager stockholders, including Michael Singer, Chairman and Chief Executive
Officer, and John Kang, President, owning an aggregate of approximately 37% of
the issued and outstanding shares of Medical Manager common stock have entered
into an irrevocable agreement to vote their shares in favor of the Merger. In
addition, Martin J. Wygod, Chairman of Synetic, has executed a similar
irrevocable voting agreement to vote shares representing approximately 26% of
the issued and outstanding shares of Synetic common stock in favor of the
Merger.
Upon completion of the Merger, the combined company will
change its name to Medical Manager Corporation. In addition, Medical Manager and
CareInsite, Inc., a majority-owned subsidiary of Synetic ("CareInsite"), have
entered into an agreement under which CareInsite will be the exclusive provider
of certain network, web-hosting and transaction services to Medical Manager.
Under the collar mechanism contained in the Merger Agreement,
the exchange ratio will be adjusted to yield a value of $42.00 for each share of
Medical Manager common stock if the average price of Synetic common stock is
between $67.20 and $56.00 during the ten trading day period immediately
preceding the two trading days prior to Medical Manager's shareholders' meeting
to vote on the Merger. In addition, Medical Manager has a right to
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terminate the Merger Agreement if Synetic's stock price falls below $56.00
during the same measurement period.
A copy of the joint press release issued by Synetic and
Medical Manager on May 17, 1999 is attached hereto as Exhibit 99.1 and is hereby
incorporated by reference in its entirety.
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EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press Release, dated May 17, 1999.
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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.
SYNETIC, INC.
Date: May 18, 1999 By: /s/ Charles A. Mele
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Name: Charles A. Mele
Title: Executive Vice President and
General Counsel
FOR IMMEDIATE RELEASE
Contact: James R. Love Lee Robbins
Synetic, Inc. Medical Manager Corporation
Executive Vice President and Chief Financial Officer
Chief Financial Officer (813) 287-2990
(201) 703-3400
SYNETIC AND MEDICAL MANAGER ANNOUNCE MERGER
ELMWOOD PARK, NJ and TAMPA, FL, May 17, 1999 - Synetic, Inc. (NASDAQ:SNTC) and
Medical Manager Corporation (NASDAQ:MMGR) today announced that the two companies
have signed a definitive merger agreement providing for a strategic business
combination between Synetic and Medical Manager, a leading provider of physician
practice management systems, in a tax free pooling of interests transaction
valued at approximately $1.4 billion. The merger creates an organization with
the components needed to transform the information infrastructure of America's
practicing physicians, with the goal of revolutionizing the way in which
physicians can communicate electronically with payers, suppliers, providers and
patients. Synetic, Inc. operates two principle lines of business, healthcare
electronic commerce services through CareInsite, Inc., and plastics and
filtration technologies through Porex Corporation.
Terms of the merger call for each outstanding share of Medical Manager common
stock to be exchanged into 0.625 newly issued shares of Synetic common stock,
subject to a collar mechanism. Completion of the agreement, which is expected
during the quarter ending September 30, 1999, is subject to approval by
Synetic's and Medical Manager's shareholders, regulatory approval and certain
other customary conditions.
According to Martin J. Wygod, Chairman of Synetic, "Medical Manager represents
the Company's initial transaction focused on building a significant base of
physicians. With a physician base estimated at more than 120,000 and a premier
service and support network, Medical Manager has become a trusted partner in the
physician's office and the defacto information technology department to a
meaningful share of the nation's physicians." He continued, "In order to create
the most effective channel of communication between physicians and their
constituents, one must not only maximize the number of participating physicians,
but also be in a position to transform the underlying information infrastructure
of the medical practice. Together, we expect Medical Manager and CareInsite to
be differentiated by our ability to implement products and services truly
integrated into the workflow of the physician's practice."
Commenting on the transaction, Mickey Singer, Chairman and CEO of Medical
Manager said, "Synetic's history of innovation in managed care, its success in
building relationships with payers, and its ability to implement an economic
model that benefits both physicians and payers, provides the combined companies
with substantial advantages." He continued, "The merger
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creates important synergies for both companies. CareInsite gains the ability to
implement its services to more than 120,000 Medical Manager physicians
nationwide, and provides Medical Manager with an opportunity to develop and
implement the next generation of Internet enabled software products and services
for the physician practice."
Medical Manager is a leading provider of comprehensive physician practice
management systems which automate the mission critical tasks for approximately
120,000 physicians in more than 24,000 medical practices nationwide. The
Company's distribution network of almost 2,000 sales and technical support
personnel provide service, training and support to physician offices in every
major market in the United States.
CareInsite provides innovative healthcare network and e-commerce services that
leverage Internet technology to enable the confidential exchange of clinical,
administrative and financial information between physicians, and their
affiliated payers, patients, providers and suppliers. The Company's services are
designed to simplify physician administration of payer rules leading to reduced
healthcare costs, improved care, and more satisfied patients. CareInsite expects
to achieve broad distribution of its services to physicians through its own web
portal, and through integration with the physician and hospital information
management systems resident in the physician's practice.
Martin J. Wygod will serve as Chairman of the combined company. Synetic's
current senior management team will remain in place with the addition of two
executives from Medical Manager. Mickey Singer will become the Vice Chairman and
Co-CEO and John Kang, currently President of Medical Manager, will become
Co-CEO. In addition, several members of the Synetic senior management team will
fill the key management positions of CareInsite, including Paul Suthern who will
serve as its CEO. The Board of Directors of the combined company will be
expanded from eleven to sixteen, with the addition of five Medical Manager
directors.
Upon completion of the merger agreement, the combined company will change its
name to Medical Manager. In addition, Medical Manager and CareInsite have
entered into an agreement under which CareInsite will be the exclusive provider
of certain network, web hosting and transaction services to Medical Manager.
Under the collar mechanism contained in the merger agreement, the exchange ratio
will be adjusted to yield a value of $42.00 for each share of Medical Manager
common stock if the average price of Synetic common stock is between $56.00 and
$67.20 during the ten trading day period immediately preceding the two trading
days prior to the shareholder's meeting to approve the transaction. In addition,
Medical Manager may terminate the merger if the average price of Synetic's
common stock is less than $56.00 during the same measurement period.
Medical Manager stockholders, including Mickey Singer and John Kang, owning an
aggregate of approximately 37% of the outstanding shares of Medical Manager have
executed an irrevocable voting agreement to vote their shares in favor of the
merger agreement. Martin J. Wygod, Chairman of Synetic, has executed a similar
agreement to vote the Synetic shares that he controls, representing 26% of the
outstanding stock of Synetic, in favor of the merger. In connection with the
execution of the merger agreement, Medical Manager has granted to Synetic
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an option to purchase shares of Medical Manager common stock constituting 19.9%
of the outstanding shares of Medical Manager in the event that the merger
agreement is terminated in certain circumstances. Synetic has granted a similar
option to Medical Manager with respect to 10% of the outstanding shares of
Synetic.
As previously announced, Synetic's healthcare e-commerce subsidiary, CareInsite,
has filed a registration statement for the initial public offering of shares of
its common stock. Subject to the filing and approval of the appropriate
amendments with the Securities and Exchange Commission, Synetic intends to
proceed as planned with this initial public offering and hopes to consummate
this offering as soon as possible.
A registration statement relating to the securities of CareInsite referred to in
this press release has been filed with the Securities and Exchange Commission
but has not yet become effective. 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 or 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 prior
to the registration or qualification under the securities laws of such state.
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The statements contained in this release, other than the terms of the merger,
are forward looking statements that involve risks and uncertainties, including
but not limited to successful closure of the merger and integration of the
Synetic and Medical Manager products, the feasibility of developing commercially
profitable healthcare e-commerce services, the effect of economic conditions,
physician and other user acceptance, the impact of competitive products,
services, and pricing, product development, commercialization and technological
difficulties, and other risks detailed in Synetic's and Medical Manager's
Securities and Exchange Commission filings.
