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 18, 1998
SPS TRANSACTION SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10993 36-3798295
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
2500 Lake Cook Road, Riverwoods, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 405-3700
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Item 5. Other Events
On April 18, 1998, SPS Transaction Services, Inc. (the "Company") and
Associates First Capital Corporation ("Associates") entered into a stock
purchase agreement (the "Purchase Agreement") pursuant to which the
Company has agreed to sell and Associates has agreed to acquire all of
the capital stock of the Company's two wholly-owned operating
subsidiaries - SPS Payment Systems, Inc. and Hurley State Bank, for a
price of approximately $896 million in cash, upon the terms and subject
to the conditions of the Purchase Agreement, including certain regulatory
approvals and approval by the Company's stockholders. Associates has
also agreed to fund the repayment of all intercompany indebtedness of SPS
Payment Systems, Inc. and Hurley State Bank, and their subsidiaries,
owing to the Company or its affiliates.
The Company is a majority-owned indirect subsidiary of Morgan Stanley
Dean Witter & Co. ("MSDW"). Since MSDW will assume certain liabilities
and obligations incurred by the Company in connection with the sale, the
per share price that will be distributed to the Company's public
stockholders, which will be approximately $32, will be greater than the
per share price to be received by MSDW. The distribution of the purchase
price to the Company's public stockholders will be effected pursuant to a
merger of the Company with an indirect subsidiary of MSDW as soon as
practical after the closing of the sale of assets. The per share amount
to be received by the public stockholders will be set forth in the
Company's proxy statement that will be mailed to stockholders in
connection with a special stockholders meeting to vote upon the sale and
the merger. Holders of options to purchase Company common stock who have
not previously exercised their options will receive in the merger an
amount of cash per share underlying such option equal to the amount, if
any, by which the per share purchase price paid in the merger to holders
of Company stock exceeds the exercise price of the options.
NOVUS Credit Services Inc., a subsidiary of MSDW that owns approximately
73.3 percent of all the Company's outstanding stock ("NOVUS"), has entered into
a voting agreement with Associates pursuant to which NOVUS has agreed to vote
all shares of the Company owned by it in favor of the transactions contemplated
by the Purchase Agreement. The voting agreement is terminable upon the
earliest to occur of (i) the prior termination of the Purchase Agreement, (ii)
the consummation of the sale transaction contemplated by the Purchase Agreement
and (iii) January 18, 1999. Unless the Voting Agreement is terminated in
accordance with its terms, NOVUS's obligation to vote in favor of the
transactions contemplated by the Purchase Agreement is unconditional and
absolute.
Attached hereto as Exhibit 99.1 is the press release of April 20, 1998
issued by the Company in connection with the transactions contemplated by the
Purchase Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release of the Registrant dated April 20, 1998.
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.
SPS TRANSACTION SERVICES, INC.
Date: May 5, 1998 By: /s/ Russell J. Bonaguidi
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Russell J. Bonaguidi
EXHIBIT INDEX
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Exhibit
Number Description of Exhibits
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99.1 Press release of the Registrant dated April 20, 1998.
EXHIBIT 99.1
NEWS RELEASE
For Release: IMMEDIATE
Contact: Associates First Capital Corporation
News Media: Joe Stroop, Phone (972) 652-4522
Shareholders: 1-888-NYSE-AFS
SPS Transaction Services, Inc.
News Media: Jean Fargo, Phone (847) 405-3953
Investors: Dave Rai, Phone (847) 405-4103
THE ASSOCIATES TO ACQUIRE ASSETS OF
SPS TRANSACTION SERVICES
DALLAS, April 20, 1998 - Associates First Capital Corporation (NYSE:AFS) and
SPS Transaction Services, Inc. (NYSE:PAY), jointly announced today that The
Associates has agreed to acquire substantially all of the assets of SPS, which
consist of the stock of its two operating subsidiaries, for approximately $896
million. The sale, which is subject to customary conditions, including certain
regulatory approvals and approval by SPS stockholders, has been approved by the
directors of both corporations.
SPS is a majority-owned indirect subsidiary of Morgan Stanley Dean Witter &
Co. (MSDW). Since MSDW will assume certain liabilities and obligations incurred
by SPS in connection with the sale, the per share price that will be
distributed to SPS public stockholders, which will be approximately $32, will
be greater than the per share price to be received by MSDW. The distribution of
the purchase price to the SPS public stockholders will be effected pursuant to
a merger of SPS with an indirect subsidiary of MSDW as soon as practical after
the closing of the sale of assets. The per share amount to be received by the
public stockholders will be set forth in the SPS proxy statement that will be
mailed to stockholders in connection with a special stockholders meeting to
vote upon the sale and the merger. A subsidiary of MSDW that owns approximately
73.3 percent of all SPS outstanding stock has entered into a voting agreement
with The Associates to vote all of its shares of SPS in favor of the purchase.
Holders of options to purchase SPS common stock who have not previously
exercised their options will receive in the merger an amount of cash per share
underlying such option equal to the amount, if any, by which the per share
purchase price paid in the merger to holders of SPS stock exceeds the exercise
price of the options.
The acquisition will provide The Associates with a substantial portfolio of
credit card receivables - including private-label relationships with market-
leading corporations that have well-established brands - and a range of
technology capabilities such as transaction processing, portfolio management
and inbound teleservices.
"This acquisition adds immediately to the size and capabilities of our
credit card operation and has potential to make significant contributions to
other businesses, as well. The possibilities for growth are substantial," said
Keith W. Hughes, chairman and chief executive officer of The Associates. "We
are acquiring a sound and profitable business with 4,500 talented employees,
access to millions of new customers and a measurable enhancement of our
technology platform."
SPS, through its two principal subsidiaries -- SPS Payment Systems, Inc. and
Hurley State Bank, manages a portfolio of private-label consumer and commercial
credit card relationships. Managed credit card receivables outstanding at
December 31, 1997 were $2.3 billion.
SPS processes credit card transactions, administers consumer private label
credit card programs, processes commercial accounts receivable and handles
inbound teleservices. SPS net income for 1997 was $38.5 million on net revenues
of $347 million. The company's 4,500 employees operate out of their Riverwoods,
Ill. headquarters and four operations/call centers.
"We are very positive about our new relationship," said Robert L. Wieseneck,
president and chief executive officer of SPS. "We believe the acquisition by
The Associates, a leading diversified finance company, will provide us with the
opportunity to offer a wider variety of products and services to our clients
and their customers.
Philip J. Purcell, chairman and chief executive officer of MSDW commented,
"SPS has performed well, but in the year since the creation of Morgan Stanley
Dean Witter, we have developed a strategy that focuses more directly on our
core securities, asset management and general credit services businesses."
Associates First Capital Corporation (NYSE:AFS) is a leading provider of
consumer and commercial financing, leasing and related services through 2,400
offices in eight countries. Headquartered in Dallas, it has managed assets of
more than $63 billion and is one of the nation's 100 largest corporations,
based on market capitalization.
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