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) March 30, 2000
Commission file number: 1-11106
PRIMEDIA Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3647573
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
745 Fifth Avenue, New York, New York
(Address of principal executive offices)
10151
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(Zip Code)
Registrant's telephone number, including area code (212) 745-0100
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ITEM 5. OTHER EVENTS
(a) On March 30, 2000, PRIMEDIA Inc. (the "Registrant"), announced the formation
of a strategic alliance with CMGI, Inc. ("CMGI"). As part of the alliance, CMGI
will acquire approximately 8 million shares of the Registrant's Common Stock
(par value $.01) ("Common Stock") in exchange for 1.53 million shares of common
stock of CMGI. CMGI also has the right to acquire a 50% equity interest in up to
six vertical online communities maintained by IndustryClick Corp. and
PRIMEDIANet Inc., wholly owned subsidiaries of the Registrant.
(b) On March 30, 2000, the Registrant announced the formation of a strategic
alliance with Liberty Media Corporation ("Liberty Media"). As part of the
alliance, Liberty Media will acquire 8 million shares of the Registrant's Common
Stock and warrants to acquire 1.5 million shares of the Registrant's Common
Stock at $25 per share in exchange for $200 million in cash and the purchase by
the Registrant of 625,000 shares of Liberty Digital ("Liberty Digital"), an
interactive television and Internet affiliate of Liberty Media. In addition,
Liberty Media, or Liberty Digital will receive an option to acquire a 12.5%
stake in the Registrant's newly formed PRIMEDIA Broadband Video unit in exchange
for cash, Liberty Digital Series A common stock or Liberty Media Group tracking
stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The Exhibits to this report are listed in the Index to Exhibits on page 4.
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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 thereunto duly authorized.
PRIMEDIA Inc.
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(Registrant)
Date: April 9, 2000 /s/ Thomas S. Rogers
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(Signature)
Chairman and Chief Executive Officer
(Principal Executive Officer)
Date: April 9, 2000 /s/ Robert J. Sforzo
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(Signature)
Senior Vice President and Controller
(Principal Accounting Officer)
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INDEX TO EXHIBITS
Exhibit No. Description
99.1 Press release, announcing alliance between CMGI, Inc. and
PRIMEDIA Inc.
99.2 Press release, announcing alliance between Liberty Media
Corporation and PRIMEDIA Inc.
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EXHIBIT 99.1
CMGI and PRIMEDIA Announce Strategic Alliance
New Alliance to Include Equity Exchange Between the Two Companies;
Alliance to Accelerate PRIMEDIA's Internet Initiatives,
Leverage Investment and Development Strength of CMGI Network to
Fuel Growth in Key B2B and B2C Verticals
ANDOVER, Mass. and NEW YORK, March 30, 2000 - David Wetherell, chairman
and CEO of CMGI, Inc. (NASDAQ: CMGI) and Tom Rogers, chairman and CEO of
PRIMEDIA (NYSE: PRM) today announced the formation of a strategic alliance that
is intended to leverage each company's respective expertise in Internet
investment and development and deep vertical industry content to fund and
develop a series of new Web ventures. As part of the alliance, CMGI will acquire
approximately 5 percent of PRIMEDIA (8 million PRIMEDIA shares) in exchange for
1.53 million shares of CMGI.
CMGI is the world's largest and most diverse network of Internet
companies, including more than 65 leading Internet businesses spanning online
marketing, content and community, infrastructure and e-commerce disciplines.
PRIMEDIA is a leading targeted media company and the publisher of more than 250
magazine titles, 232 business and consumer information products, a variety of
video businesses, and more than 200 Web sites.
In addition to the initial share exchange, the new online companies, to
be jointly created and funded by CMGI and PRIMEDIA, are expected to include
participation from CMGI @Ventures, CMGI's affiliated venture capital arm, and
vertical-specific content and intellectual property investments from PRIMEDIA.
In addition, it is intended that each vertical venture will access and leverage
the growing stable of CMGI-related products and services including companies
such as MyWay.com, Engage, 1stUp.com, and NaviSite to help drive traffic, fuel
monetization and provide access and hosting capabilities.
Under the agreement, CMGI and PRIMEDIA will jointly identify key
vertical areas, spanning both business-to-consumer (B2C) and
business-to-business (B2B) categories, such as agribusiness, digital
entertainment, electrical/construction and telecommunications, for these new
companies. The B2B ventures will cover vertical online communities being
developed by PRIMEDIA's IndustryClick, the company's B2B portal.
"For several months now, CMGI and PRIMEDIA have been crossing paths
through our various operating and venture capital businesses, and I've come to
appreciate the incredible array of vertical content assets within PRIMEDIA, both
in the B2B and B2C spaces," said Wetherell. "PRIMEDIA is a company from which an
enormous amount of new media value can be created, and through the application
of our Internet expertise and various network services I'm confident that both
companies can reap tremendous benefits. Since joining last Fall, Tom Rogers has
gotten the company off to a fast start as a new media player and I look forward
to exploring additional ways for our companies to create value together in the
future."
"Dave Wetherell's accomplishments with CMGI speak for themselves," said
Rogers. "CMGI's combination of online operating expertise and investment skill
provide a basis for a unique strategic collaboration between our two companies.
I am confident that this relationship will be a great catalyst for PRIMEDIA's
growth. This is a wonderful validation of PRIMEDIA's present asset base and our
new media future for which we are very proud."
About PRIMEDIA
PRIMEDIA Inc. is a targeted media company, reaching consumer and
business-to-business audiences through print, Internet, live events, video and
radio. Some key consumer brands include Seventeen, New York, Chicago, Fly
Fisherman, Channel One Network, Horticulture, Modern Bride and American Baby and
some key business-to-business brands include IntelliChoice, Telephony, Ward's,
PROMO, SIMBA and American Demographics. Some of its more than 200 Internet sites
include Seventeen.com, Mediacentral.com, Apartmentguide.com and Modernbride.com.
About CMGI and CMGI @Ventures
With more than 65 companies, CMGI, Inc. (Nasdaq: CMGI) represents the largest,
most diverse network of Internet businesses in the world, including both CMGI
operating companies and synergistic investments made through its venture capital
affiliate, CMGI @Ventures. CMGI leverages the technologies; content and market
reach of its extended family of companies to foster rapid growth and industry
leadership across its network and the larger Internet Economy. Compaq, Intel,
Microsoft, Pacific Century CyberWorks and Sumitomo hold minority positions in
CMGI.
CMGI's majority-owned operating companies include Engage Technologies (Nasdaq:
ENGA), NaviSite (Nasdaq: NAVI), 1ClickBrands, 1stUp.com, Activate.net, AdForce,
Adsmart, AltaVista, CMGI Solutions, Equilibrium, Flycast, iCAST, MyWay.com,
NaviNet, SalesLink, Tribal Voice and yesmail.com. CMGI @Ventures has ownership
interests in 48 Internet companies, including Lycos, Inc. (Nasdaq: LCOS),
Critical Path (Nasdaq: CPTH), Silknet (Nasdaq: SILK), MotherNature.com (Nasdaq:
MTHR), Ventro (Nasdaq: VNTR) and Vicinity (Nasdaq: VCNT).
CMGI's corporate headquarters is at 100 Brickstone Square, Andover, MA 01810,
Tel: 978-684-3600. CMGI @Ventures has offices there as well as at 3000 Alpine
Road, Menlo Park, CA 94028. For additional information and a full listing of the
CMGI and CMGI @Ventures companies, see http://www.cmgi.com and
http://www.ventures.com.
This release contains forward-looking statements based on current expectations
or beliefs, as well as a number of assumptions about future events, and these
statements are subject to important factors and uncertainties that could cause
actual results to differ materially from those described in the forward-looking
statements. For a detailed discussion of these and other cautionary statements,
please refer to CMGI's filings with the Securities and Exchange Commission,
including CMGI's Annual Report on Form 10-K for the most recently ended fiscal
year.
This release contains certain forward-looking statements concerning PRIMEDIA's
operations, economic performance and financial condition. These statements are
based upon a number of assumptions and estimates which are inherently subject to
uncertainties and contingencies, many of which are beyond the control of the
Company, and reflect future business decisions which are subject to change. Some
of these assumptions may not materialize, and unanticipated events will occur
which can affect the Company's results.
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EXHIBIT 99.2
Liberty and PRIMEDIA Announce New Strategic Relationship
Liberty Will Take 5% Stake in PRIMEDIA
Further Announces Liberty Receives Option to Acquire 12 1/2% Stake in
Newly Formed PRIMEDIA Broadband Video
and Investment by PRIMEDIA in Liberty Digital Stock
NEW YORK, March 30, 2000 - Liberty Media Corporation (NYSE: LMG.A and
LMG.B) and PRIMEDIA (NYSE: PRM) announced today a strategic alliance in which
Liberty Media will invest $200 million in cash in PRIMEDIA in exchange for a 5
percent stake, and 1 1/2 million warrants in the Company. Additionally, Liberty
Media, or its interactive television and Internet affiliate, Liberty Digital
(Nasdaq: LDIG), will receive an option to acquire a 12 1/2 percent stake in the
Company's newly formed PRIMEDIA Broadband Video unit in exchange for cash,
Liberty Digital Series A common stock or Liberty Media Group tracking stock. The
companies also agreed to work together to develop consumer broadband video and
other interactive video applications for PRIMEDIA's exclusive portfolio of
content. PRIMEDIA will purchase $25 million of Liberty Digital stock to cement
further the relationship between the two companies.
PRIMEDIA Broadband Video was recently established to exploit, for
purposes of the consumer marketplace, broadband distribution and interactive
applications of PRIMEDIA's substantial video resources. Through this alliance,
the unit will be developing streaming video, interactive video and broadband
video based on PRIMEDIA's targeted consumer media products.
"Our new strategic relationship with PRIMEDIA presents an excellent
opportunity for the Liberty Media and Liberty Digital shareholders," said Robert
Bennett, president and chief executive officer of Liberty Media. "PRIMEDIA's
vast array of consumer and business brands, its deep reservoir of content and
its aggressive, entrepreneurial management, position it well in the world of
broadband media. We are excited by the prospect of working with Tom Rogers to
develop PRIMEDIA's tremendous potential."
"I have known Tom Rogers for many years and have enormous respect for
the great value he created at NBC in the cable and new media arenas," said John
C. Malone, chairman of Liberty Media. "I am confident of the fact that he will
steer a course creating great value from PRIMEDIA's assets, and Liberty is proud
to be part of his efforts to do so."
"Liberty Media's investment in PRIMEDIA is a tremendous validation of
the upside potential of our company," said Rogers. "I have long recognized John
Malone and Dob Bennett as two of the greatest creators of media franchise value
around. We are incredibly honored to have them participate in PRIMEDIA."
"PRIMEDIA has a substantial library of quality video content for the
consumer marketplace and is in the unique position of having an economic model
to maximize its value," said Lee Masters, president and CEO of Liberty Digital.
"I have always believed very strongly that one of the most lucrative
opportunities in the broadband world lies in special-interest video programming.
PRIMEDIA Broadband Video's access to this type of content makes this investment
opportunity a compelling one for us as we implement our interactive TV
strategy."
"Lee Masters is one of the most respected cable programming executives
in the country and he has created in Liberty Digital a powerhouse of interactive
television initiatives," continued Rogers. "The opportunity to work with Lee and
Liberty Digital to develop the full broadband potential of PRIMEDIA's vast video
products is a critical building block in the transformation of our company.
Jim Ritts, president of PRIMEDIA Broadband Video and a founder of
Channel One commented, "Getting PRIMEDIA Consumer Broadband Video off the ground
is an exciting opportunity and working with a clear industry leader like Liberty
Digital will be a great catalyst to our efforts."
Under terms of the deal, Liberty Media will purchase 8 million shares
of newly issued shares in PRIMEDIA with a one-year lockup. Liberty Media or
Liberty Digital will receive an option to acquire a 12 1/2% stake in PRIMEDIA
Broadband Video at fair market value. The price and other specific terms of the
option will be negotiated during the 90 days following closing of Liberty
Media's investment. Such closing is subject to certain regulatory approvals and
is expected to occur in the second quarter of 2000. On closing its investment in
PRIMEDIA, Liberty Media will receive warrants to buy 1.5 million shares of
PRIMEDIA at $25 per share exercisable within three years. PRIMEDIA will acquire
625,000 shares of Liberty Digital at $40 per share simultaneous with Liberty
Media's investment in PRIMEDIA.
Liberty Media holds interests in a broad range of video programming,
communications, technology and Internet businesses in the United States, Europe,
South America and Asia.
Liberty Digital, Inc. is an emerging leader in interactive
television withinvestments in related companies, as well as Internet
content and infrastructure.
PRIMEDIA Inc. is a targeted media company, reaching consumer and
business-to-business audiences through print, Internet, live events, video and
radio. Some key consumer brands include Seventeen, New York, Chicago, Fly
Fisherman, Channel One Network, Horticulture, Modern Bride and American Baby and
some key business-to-business brands include IntelliChoice, Telephony, Ward's,
PROMO, SIMBA and American Demographics. Some of its more than 200 Internet sites
include Seventeen.com, Mediacentral.com, Apartmentguide.com and Modernbride.com.
This release contains certain forward-looking statements concerning PRIMEDIA's
operations, economic performance and financial condition. These statements are
based upon a number of assumptions and estimates which are inherently subject to
uncertainties and contingencies, many of which are beyond the control of the
Company, and reflect future business decisions which are subject to change. Some
of these assumptions may not materialize, and unanticipated events will occur
which can affect the Company's results.