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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
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Date of Report (Date of
earliest event reported): December 18, 1997
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INTERMEDIA COMMUNICATIONS INC.
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(Exact name of registrant as specified in its charter)
Delaware 59-2913586
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(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
0-20135
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(Commission File Number)
3625 Queen Palm Drive, Tampa, Florida 33619-1309
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 829-0011
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ITEM 5. OTHER MATERIALLY IMPORTANT EVENTS.
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On December 17, 1997, the Registrant issued the press release attached
hereto as Exhibit 99.1.
ITEM 7. EXHIBITS
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Press Release, dated December 17, 1997.
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SIGNATURE
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.
Date: December 18, 1997
INTERMEDIA COMMUNICATIONS INC.
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(Registrant)
By: /s/ Robert M. Manning
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Name: Robert M. Manning
Title: Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
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Exhibit
No. Description
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99.1 Press Release, dated December 17, 1997.
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EXHIBIT 99.1
[LOGO] NEWS RELEASE
INTERMEDIA
COMMUNICATIONS CONTACTS: Robert M. Manning
Senior Vice President and
Chief Financial Officer
3625 Queen Palm Drive 813/829-2403
Tampa, Florida 33619 or
(813) 829-0011 Chris Brown
hpp://www.icix.net Senior Vice President
Fax: (813) 829-2913 Investor Relations
813/829-2408
INTERMEDIA SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
LDS COMMUNICATIONS GROUP
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WOULD ACCELERATE PROFITABLE GROWTH IN TEXAS, LOUISIANA AND OKLAHOMA
Tampa, Florida (December 17, 1997) - Intermedia Communications (Nasdaq/NM: ICIX)
today announced that it has signed a definitive agreement to acquire LDS
Communications Group ("LDS"), a regional interexchange carrier, for $151 million
in stock and cash.
LDS, with annualized third quarter 1997 revenue of approximately $111
million and annualized third quarter EBITDA of approximately $13 million
provides long distance voice and data telecommunications services, including
Internet access and World Wide Web services. Headquartered in Monroe, Louisiana,
LDS serves more than 45,000 business customers and employs approximately 120
sales professionals in a multi-state region focused on Texas, Oklahoma and
Louisiana.
The $151 million purchase consideration would be a combination of
approximately $120 million or approximately 2.3 million shares (subject to
certain adjustments) of Intermedia common stock and $31 million in cash. Should
the acquisition of LDS and the pending Shared Technologies Fairchild acquisition
be consummated, Intermedia would have pro forma annualized third quarter 1997
revenue of approximately $580 million, approximately $(2.0) million pro forma
annualized EBITDA (before considering any synergies), and would employ over
2,800 people, including nearly 600 in sales and sales support, serving
approximately 80,000 business customers.
Closing of the acquisition is subject to customary conditions, including
the receipt of required regulatory approvals.
ACQUISITION WOULD FACILITATE MARKET ENTRY, SUPPORT SWITCH DEPLOYMENT
LDS's facilities-based interexchange network provides services to the
major markets in Texas, Louisiana and Oklahoma. When coupled with the previous
acquisition of the data
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network business of NetSolve and the pending acquisition of Shared Technologies
Fairchild, LDS would solidify Intermedia's market position within the region.
This transaction would add substantial traffic to Intermedia's local/long
distance switches being turned up in Dallas and Houston, and to LDS's local/long
distance switch already in service in Shreveport, Louisiana.
"We are encouraged that this proposed transaction continues our
strategic path of blending organic growth with carefully targeted acquisitions.
LDS has assembled a truly unique property, particularly in Louisiana and Texas,
having amassed an approximately 5% long distance market share in Louisiana and
over $30 million in revenue from Texas. LDS's success in building this valuable
asset is due in part to a philosophy we jointly share -- an emphasis on
delivering exceptional service and building long-term customer relationships,"
said David C. Ruberg, Intermedia's chairman, president, and chief executive
officer. "Evaluation of their customer base reveals exceptional customer
loyalty, surpassing industry norms. This transaction would bring a quality
customer base, acceleration of time to market in new cities, an increase in our
network density in the region, and high quality employees, satisfying our
strategic criteria for acquisitions."
FINANCIAL SYNERGIES
"The benefits we expect to realize from this transaction stem from
accelerating our profitable entry into this important region," stated Robert M.
Manning, Intermedia's chief financial officer. "Consistent with our philosophy
of cost effective capital deployment, we are adding over $100 million of revenue
in a region where we are soon to turn on our DMS500 switches in Dallas and
Houston. This level of long distance traffic, together with the sales force
infrastructure necessary to sell local exchange services immediately, justifies
the capital cost associated with the roll out of those switches. We expect the
transaction to include approximately $8 million in one-time cost synergies and
$4.5 million in recurring cost synergies. These would be realized principally by
avoiding the expenses associated with establishing a sales force; avoiding the
cost of capital expenditures for redundant switch deployment and network
infrastructure; and from the reduction of long distance termination charges."
The Company expects to close the transaction during the fist quarter of 1998.
Intermedia will host a conference call at 9:00 a.m. EST to discuss this
proposed transaction. To participate in this conference, call (800) 616-7812. A
24-hour replay will be available by calling (800) 633-8284, ID 3571577.
Bear, Stearns & Co., Inc. served as financial advisor to Intermedia with
regard to the proposed acquisition. Daniels & Associates, L.P. served as
financial advisor to LDS.
Statements contained in this news release regarding expected financial
results and other planned events are forward-looking statements, subject to
uncertainties and risks, including, but not limited to, the demand for
Intermedia's services, and the ability of the
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Company to successfully implement its strategies, including consummation of the
LDS acquisition, the successful integration of LDS into Intermedia and the
consequent realization of projected synergies, each of which may be impacted,
among other things, by economic, competitive or regulatory conditions. These and
other applicable risks are summarized under the caption "Risk Factors" in the
Company's Form 10-K Annual Report for its fiscal year ended December 31, 1996,
and are updated periodically through the filing of registration statements with
the Securities and Exchange Commission.
Intermedia Communications is one of the nation's fastest growing
telecommunications companies, providing integrated telecommunications solutions
to business and government customers. These solutions include voice and data,
local and long distance, and advanced network access services in major U.S.
markets. Intermedia's enhanced data portfolio, including frame relay networking,
ATM, and a full range of business Internet connectivity and web hosting
services, offers seamless end-to-end service virtually anywhere in the world.
Intermedia is headquartered in Tampa with sales offices in over 40
cities. Intermedia can be found on the World Wide Web at
http://www.intermedia.com.
Founded in 1982, LDS Communications Group is a regional interexchange
carrier providing long distance voice, video, Internet access and data services
to customers throughout a six-state area in the southern U.S. LDS can be found
on the World Wide Web at http://www.ldscommunications.com.
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