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PROSPECTUS
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-34975
560,000 Shares
AMERICAN BUSINESS INFORMATION, INC.
Common Stock
All of the shares of Common Stock offered hereby are being sold by certain
stockholders of the Company (the "Selling Stockholders") who received
unregistered shares of the Company's Common Stock as consideration for their
stock in County Data Corp. ("CDC") which the Company acquired in November 1996.
The shares of Common Stock offered hereby represent approximately 2 percent of
the Company's currently outstanding Common Stock. Such shares are being offered
on a continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended. No underwriting discounts, commissions or expenses are payable or
applicable in connection with the sale of such shares. The Common Stock of
American Business Information, Inc. (the "Company") is quoted on the National
Association of Securities Dealers' Automated Quotation System ("Nasdaq")
National Market System ("NMS") under the symbol "ABII." The shares of Common
Stock offered hereby will be sold from time to time at then prevailing market
prices, at prices relating to prevailing market prices or at negotiated prices.
On September 2, 1997, the closing price of the Common Stock on the Nasdaq NMS
was $27.5625.
SEE "RISK FACTORS" COMMENCING ON PAGE 4 HEREOF FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON
STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS SEPTEMBER 17, 1997
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (together with all
amendments, and exhibits, the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of Common
Stock offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which have been
omitted in accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement. Statements in this
Prospectus as to the contents of any contract or other document referred to
herein are not necessarily complete, and in each instance in which a copy of
such contract is filed as an exhibit to the Registration Statement, reference is
made to such copy, and each such statement shall be deemed qualified in all
respects by such reference. Copies of the Registration Statement may be
inspected, without charge, at the offices of the Commission, or obtained at
prescribed rates from the Public Reference Section of the Commission at the
address set forth below.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities of the
Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street. N.W.,
Washington, D.C. 20549, and at the Commission's regional offices at Seven World
Trade Center, 13th Floor, New York, New York 10048; and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission also maintains a website that contains reports, proxy and
information statements, and other information regarding registrants that file
electronically with the Commission at the address "HTTP://WWW.SEC.GOV." The
Company's Common Stock is quoted for trading on the Nasdaq National Market and
reports, proxy statements and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 9513 Key West Avenue, Rockville, Maryland 20850.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY BY ANY PERSON
IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH AN
OFFER OR SOLICITATION.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Company's Annual Report on Form 10-K filed with the Commission for
the fiscal year ended December 31, 1996, as amended, and Quarterly
Reports on Form 10-Q filed with the Commission for the three months
ended March 31, 1997, as amended, and for the three months ended June
30, 1997.
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(b) The Company's Current Report on Form 8-K filed with the Commission on
February 28, 1997, as amended by the Company's Current Report on Form
8-K/A filed with the Commission on April 30, 1997, as further amended
on September 4, 1997, and on the Company's Current Report on Form 8-K
filed with the Commission on August 5, 1997.
(c) The description of the Company's Common Stock contained in the
Company's registration statement on Form 8-A filed with the Commission
on October 31, 1991, and the description of the Company's Preferred
Stock Purchase Rights contained in the Company's registration
statement on Form 8-A filed with the Commission on August 6, 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act following the date of this Prospectus and prior to
the termination of the offering contemplated hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. The Company will provide without charge to each
person, including any beneficial owner, to whom this Prospectus is delivered, a
copy of any and all of the information that has been incorporated by reference
in this Prospectus (not including exhibits to the information that is
incorporated by reference unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates), upon written
or oral request to: Corporate Secretary, American Business Information, Inc.,
5711 South 86th Circle, Omaha, Nebraska 68127, telephone number (402) 593-4500.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
American Business Information, American Business Lists, Inc., Compilers
Plus, Inc., American Business Credit, American Sales Leads, SalesLeads USA, CD
USA, PhoneDisc, InfoAccess, InfoUSA, List Wizard, and LookupUSA are certain
trademarks of the Company. This Prospectus also includes other trademarks of
companies other than the Company.
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THE COMPANY
The principal executive offices of the Company are located at 5711 South
86th Circle, Omaha, Nebraska 68127, and its telephone number is (402) 593-4500.
In this Prospectus, the term "ABI" or the "Company" refers to American Business
Information, Inc., a Delaware corporation, its predecessors and its
subsidiaries, unless the context otherwise requires.
RISK FACTORS
Investors should consider carefully the following risk factors, in addition
to the other information contained in this Prospectus, before purchasing the
shares of Common Stock offered hereby. The information contained herein and in
documents incorporated by reference herein include forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act. Actual results of the Company could differ materially from those
projected in the forward-looking statements. Additional information concerning
factors which could cause actual results to differ materially from those in the
forward-looking statements are set forth below in "Risk Factors."
Fluctuations in Operating Results
The Company believes that future operating results may be subject to
quarterly and annual fluctuations based on numerous factors. The Company's net
sales on a quarterly basis can be affected by seasonal characteristics and
certain other factors including the timing and extent of the Company's own
direct marketing activity. In addition, the expenses associated with acquiring
data, direct marketing campaigns and the timing of acquisitions and the costs
and expenses associated therewith may also affect operating results.
Costs of Acquisitions; Debt; Amortization of Goodwill
Since mid-1996, the Company has completed six acquisitions of other
businesses. In connection with such acquisitions, the Company has issued
approximately 3,609,000 shares of common stock and has paid approximately $98.0
million in cash. The issuance of stock in these transactions may be dilutive to
the extent that earnings per share of the acquired companies do not offset the
additional number of shares outstanding. In connection with the acquisition of
DBA Holdings, Inc. ("DBA") in February 1997 and Pro CD, Inc. in August 1997, the
Company incurred substantial new debt. Servicing such debt may result in
decreases in earnings per share, and failure to service such debt would result
in a material adverse effect on the Company's financial condition. In addition,
debt obligations require certain covenants that restrict business operations or
otherwise require the Company's business to perform at certain levels. Failure
to fulfill such covenants could result in the unavailability of future needed
credit, the acceleration of the Company's obligations under existing debt
arrangements, or foreclosure by lenders on the assets of the Company securing
such debt arrangements. In addition, acquisitions may involve substantial
integration costs and diversions of management resources. Finally, some
acquisitions may be accounted for using the purchase method instead of the
pooling of interests method, as was the case in certain acquisitions since mid-
1996 including the DBA acquisition. Purchase method accounting may require the
Company to take charges to operations and to amortize substantial amounts for
goodwill. As a result of acquisitions completed since mid-1996, the Company was
required to take one-time charges to operations of approximately $21.5 million
in the second half of 1996
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and a one-time charge of $51.8 million in the first quarter of 1997. In
addition, in connection with those acquisitions the Company will amortize
approximately $64.1 million in goodwill and certain other intangibles over a
period of 1 to 15 years. The Company anticipates an additional one-time charge
and additional amortization of goodwill in conjunction with the acquisition of
Pro CD, Inc., to be taken in the third quarter of 1997. The one-time charges and
amortization of goodwill will have an adverse effect on net income. Future
acquisitions could result in substantial charges to operations, incurrence of
debt, and amortization of goodwill and, to the extent they do, such acquisitions
will have an adverse effect on the Company's net income, earnings per share and
overall financial condition.
Dependence Upon Key Personnel
The Company believes that the hiring and retaining of qualified individuals
at all levels in the Company will be essential to the Company's ability to
manage growth successfully, and there can be no assurance that the Company will
be successful in attracting and retaining the necessary personnel. The Company
will be particularly dependent upon the efforts and abilities of its senior
management personnel. The departure of any of the Company's executive officers
could have a material adverse effect on the Company's business, financial
condition, or results of operations depending upon the timing of the departure,
changes in the Company's business prior to such time, the availability of
qualified personnel to replace them, and whether such personnel depart singly,
contemporaneously, or as a group, among other factors.
Competition
The business information industry is highly competitive. In particular, the
rapid expansion of the Internet creates a substantial new channel for
distributing business information to the market, and a new avenue for future
entrants to the business information industry. There is no guarantee that the
Company will be successful in this new market. Many of the Company's principal
competitors have substantially greater resources than the Company. In addition,
the Company has no control over the possible future entry into the marketplace
of other potential competitors, some of which may be much larger than the
Company and may have much larger capital bases from which to develop and compete
with the Company.
Direct Marketing Regulation and Postal Rates
The Company and many of its customers engage in direct marketing. Any
negative impact on direct marketing, including changes to existing laws or
regulations or future laws and regulations, may adversely affect the Company's
operating results. The direct mail industry depends and will continue to depend
upon the services of the United States Postal Service and other private mail
carriers. Any modification by the Postal Service of its rate structure, any
increase in public or private postal rates, or any substantial disruption in
such public or private postal services would generally have a negative impact on
the demand for business information, direct mail activities and the cost of the
Company's direct mail activities. In addition to the risk of rate increases, the
direct mail industry, and thus the Company's operating results, could be
adversely affected by postal strikes.
Loss of Data Centers
The Company's business depends on computer systems contained in the
Company's two data centers. The Company's disaster recovery program is based
upon maintaining redundant computer equipment at each of its data centers. The
data centers are protected by Halon fire suppression systems, designed to
extinguish a fire without damaging the computer equipment. The centers are
further protected by uninterrupted power supply backup systems. There can be no
guarantee that a fire or other disaster affecting one or both of its data
centers would not disable the Company's computer systems. Any significant damage
to either or both of the data centers could have a material adverse affect on
the Company.
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Limited Protection of Intellectual Property and Proprietary Rights
The Company relies on a combination of copyright, trademark and trade
secret laws, employee and third-party nondisclosure agreements and other methods
to protect its proprietary rights. Despite these precautions, it may be possible
for unauthorized third parties to copy certain portions of the company's
products or reverse engineer or obtain and use information that the Company
regards as proprietary. The Company generally licenses its software products to
end-users on a "right to use" basis pursuant to a perpetual license. The Company
licenses some of its products under "shrink-wrap" licenses (i.e., licenses
included as part of the product packaging). Shrink-wrap licenses are not
negotiated with or signed by individual licensees, and purport to take effect
upon the opening of the product package. Certain license provisions protecting
against unauthorized use, copying, transfer and disclosure of the licensed
program may be unenforceable under the laws of certain jurisdictions and foreign
countries. In addition, the laws of some foreign countries do not protect
proprietary rights to the same extent as do the laws of the United States. There
can be no assurance that the foregoing measures will be adequate to protect the
Company's intellectual property.
Shares Eligible for Future Sale
Of the shares of the Company's common stock outstanding, approximately 20.8
million are freely tradeable, and approximately 3.6 million are subject to
restrictions under Rule 144 of the Securities Act, based on stock ownership as
of September 2, 1997. Such shares will become freely tradeable either (i)
pursuant to certain registration rights agreements by and among the Company and
the holders thereof or (ii) upon the expiration of the applicable holding
periods pertaining to such stock, subject to applicable volume limitations on
trading, under federal securities laws. Future sales of a substantial number of
such shares of the Company's common stock could adversely affect or cause
substantial fluctuations in the market price of the Company's common stock.
SELLING STOCKHOLDERS
The Selling Stockholders acquired the shares of Common Stock offered hereby
(the "Shares") in connection with the Company's acquisition of CDC on November
1, 1996. The following is a list of Officers of CDC prior to the acquisition,
who are Selling Stockholders hereunder:
Terry F. Allen - President
Andrew F. Allen - Secretary
Jared P. Allen - Vice President
Seth W. Allen - Treasurer
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
September 2, 1997 by the Selling Stockholders (without regard to shares sold by
such person pursuant to this Prospectus). The following table assumes the
Selling Stockholders sell all of the shares offered hereby. The Company is
unable to determine the exact number of shares that will actually be sold.
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<TABLE>
<CAPTION>
Shares Beneficially Owned Shares Shares
Prior to Offering Being Owned After
Name Number Percent Offered Offering
(1) (1)
<S> <C> <C> <C> <C>
Terry F. Allen 235,600 1% -- --
Terry F. Allen
Family Charitable Trust 50,000 * -- --
Andrew F. Allen 44,800 * -- --
Jared P. Allen 44,800 * -- --
Seth W. Allen 44,800 * -- --
Winston Lewis 67,200 * -- --
Brian L. O'Connell 50,400 * -- --
Leslie P. Allen 22,400 * -- --
-------
560,000
</TABLE>
- --------------------
*Represents less than 1% of the outstanding shares of Common Stock
(1) Each Selling Stockholder above is having all of the shares of the Company's
Common Stock owned by them registered hereon. The Company is unaware of whether
such Selling Stockholders intend to sell any, some or all of such shares. None,
some or all of such shares may be sold.
PLAN OF DISTRIBUTION
In connection with the Company's acquisition of CDC, the Company entered
into a Registration Rights Agreement with the Selling Stockholders (the
"Agreement"), which is attached as an Exhibit to the Registration Statement of
which this Prospectus is a part. The Registration Statement of which this
Prospectus forms a part has been filed pursuant to the Agreement. To the
Company's knowledge, the Selling Stockholders have not entered into any
agreement, arrangement or understanding with any particular broker or market
maker with respect to the shares offered hereby, nor does the Company know the
identity of the brokers or market makers which will participate in the offering.
The Selling Stockholders' shares of Common Stock covered hereby may be
offered and sold from time to time by the Selling Stockholders, or by pledgees,
donees, transferees or other successors in interest. Subject to certain
agreements between the Selling Stockholders and the Company, the Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. The Selling Stockholders
plan to sell the shares of Common Stock offered hereby only in brokers'
transactions, as defined in Rule 144 promulgated under the Securities Act. In
general, brokers' transactions are ones in which the broker merely executes the
sell order, receives no more than the customary commission and does not solicit
orders to buy the shares. No assurances can be given that the Selling
Stockholders will sell any of the shares that are subject to this Prospectus or
that the Selling Stockholders will not sell such shares in a private transaction
or other transaction that is exempt from the registration requirements of the
Securities Act. The Company has been advised by the Selling Stockholders that
they have not, as of the date hereof, entered into any arrangement with a
broker-dealer for the sale of shares. In effecting sales, broker-dealers engaged
by the Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale. The
Selling Stockholders may also loan or pledge the shares registered hereunder to
a broker-dealer and the broker-dealer may sell the shares so loaned or upon a
default the broker-dealer may effect sales of the pledged shares pursuant to
this prospectus.
In offering the shares, the Selling Stockholders and any broker-dealers who
execute sales for the Selling Stockholders may be deemed to be "underwriters"
within the meaning of the Securities Act in
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connection with such sales, and any profits realized by the Selling Stockholders
and the compensation of each broker-dealer may be deemed to be underwriting
discounts and commissions.
The Selling Stockholders have advised the Company that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they will comply with Rules 102 and 104 of Regulation M under the
Exchange Act and, in connection therewith, the Selling Stockholders have agreed
not to engage in any stabilization activity in connection with any securities of
the Company, to furnish copies of this Prospectus to each broker-dealer through
which the shares of Common Stock included herein may be offered, and not to bid
for or purchase any securities of the Company or attempt to induce any person to
purchase any securities of the Company except as permitted under the Exchange
Act. The Selling Stockholders have also agreed to inform the Company and broker-
dealers through whom sales may be made hereunder when the distribution of the
shares is completed.
Rule 102 of Regulation M prohibits a Selling Stockholder in a distribution
from bidding for or purchasing, directly or indirectly, any of the securities
which are the subject to the distribution. Rule 104 under Regulation M governs
bids and purchases made to stabilize the price of a security in connection with
a distribution of the security.
The Selling Stockholders have agreed not to sell any of the shares of
Common Stock offered hereby without first submitting a written notice to the
Company (the "Notice of Resale"). The Company has in turn agreed to notify the
Selling Stockholders as soon as practicable, but in no event more than five
business days after receipt of the Notice of Resale, whether it believes this
Prospectus is current (with the Company using the five business day period to
supplement this Prospectus or make an appropriate filing under the Exchange Act)
or should be amended prior to use in connection with such sale (with the Company
amending the Registration Statement as soon as practicable). Once the Company
has notified the Selling Stockholders that this Prospectus is available to use,
the Selling Stockholders will have up to 60 days within which to sell shares of
Common Stock subject to compliance with the Company's policies applicable to
executive officers of the Company, including recommended trading windows.
This offering will terminate as to the Selling Stockholders on the earlier
of November 4, 1997, or the date on which all shares offered hereby have been
sold by the Selling Stockholders. There can be no assurance that the Selling
Stockholders will sell any or all of the shares of Common Stock offered hereby.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati, P.C.,
650 Page Mill Road, Palo Alto, California 94304-1050. Those members of Wilson
Sonsini Goodrich & Rosati, P.C., who work with the Company own no shares of the
Company's Common Stock.
EXPERTS
The consolidated financial statements of American Business Information,
Inc. incorporated by reference in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, as amended, have been audited by Coopers &
Lybrand L.L.P., independent auditors, as set forth in their report thereon
incorporated by reference therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
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