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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
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Date of Report (Date of earliest event reported): March 31, 1998
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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 jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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 2. Acquisition or Disposition of Assets
On March 31, 1998, Intermedia Communications Inc.
("Intermedia") consummated its acquisition of the Long Distance Savers group of
companies ("LDS"). Pursuant to that certain Acquisition Agreement dated as of
December 17, 1997 among Intermedia and the Sellers listed on Schedule A thereto,
Intermedia acquired LDS for a purchase price of approximately $153 million (of
which approximately $137 million was paid by delivering approximately 2.68
million shares of Intermedia Common Stock, par value $.01 per share, and
approximately $16 million was paid in cash) plus the retirement of approximately
$15 million of LDS's long-term debt. Intermedia funded the cash portion of the
purchase price through its existing cash reserves.
LDS is an established regional interexchange carrier,
providing long distance services and Internet access to more than 45,000
business subscribers and employing over 100 sales and customer service
professionals in Louisiana, Texas, Oklahoma, Mississippi and Florida.
Intermedia intends to continue operating LDS's assets as an
interexchange carrier providing long distance services and Internet access to
various subscribers.
Item 7. Financial Statements and Exhibits
Financial statements with respect to the acquisition of LDS
will be filed within 60 days after the date that this current report must be
filed.
The following Exhibits are filed herewith:
Exhibit 2.1 Acquisition Agreement, dated as of
December 17, 1997, among Intermedia and
the Sellers listed on Schedule A thereto.
Exhibit 2.3 to Amendment No. 1 to
Intermedia's Registration Statement Form
S-3 filed with the Commission on
January 14, 1998 is incorporated herein
by reference.
Exhibit 99.1 Press Release dated March 31, 1998.
2
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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: March 31, 1998
INTERMEDIA COMMUNICATIONS INC.
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(Registrant)
By: /s/ Patricia A. Kurlin
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Name: Patricia A. Kurlin
Title: Vice President and General Counsel
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Exhibit Index
Exhibit No. Description
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2.1 Acquisition Agreement, dated as of
December 17, 1997, among Intermedia and the
Sellers listed on Schedule A thereto. Exhibit
2.3 to Amendment No. 1 to Intermedia's
Registration Statement Form S-3 filed with the
Commission on January 14, 1998 is incorporated
herein by reference.
99.1 Press Release dated March 31, 1998.
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NEWS RELEASE
LOGO
INTERMEDIA
COMMUNICATIONS
3625 Queen Palm Drive
Tampa, Florida, 33619
(813) 829-0011
http://www.icix.net Contacts: Robert Manning
Fax: (813) 829-2913 Senior Vice President and
Chief Financial Officer
or
Chris Brown
Senior Vice President
Investor Relations
813/829-0011
INTERMEDIA COMMUNICATIONS CONSUMMATES
ACQUISITION OF LDS COMMUNICATIONS GROUP
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Company Comments on Recent Stock Performance
TAMPA, FL (March 31, 1998) -- Intermedia Communications Inc. (Intermedia -
Nasdaq/NM:ICIX) today announced the consummation of its acquisition of LDS
Communications Group ("LDS"), a regional interexchange carrier, for
approximately $153 million in stock and cash, plus the retirement of $15 million
in LDS's long-term debt.
LDS, with unaudited 1997 revenues of approximately $109 million and unaudited
1997 EBITDA of approximately $10 million, provides interexchange voice, data
networking and Internet-based services to more than 45,000 business customers,
through a sales force of approximately 120 sales professionals. Headquartered in
Monroe, Louisiana, LDS serves customers concentrated in Texas, Oklahoma, and
Louisiana, and has a local/long distance switch in service in Shreveport,
Louisiana.
Pursuant to a definitive agreement which was entered into on December 17, 1997,
purchase consideration consists of a combination of approximately $137 million
in stock, or approximately 2.68 million shares of Intermedia common stock, and
$31 million in cash including approximately $15 million in cash to retire LDS's
long-term debt. With the recently consummated acquisition of Shared Technologies
Fairchild Inc. ("Shared"), Intermedia's unaudited pro forma revenue for 1997 was
approximately $539 million, with unaudited pro forma EBITDA for 1997 of $(27)
<PAGE>
ICIX Closes Acquisition of LDS
Communications Group
Page 2
March 31, 1998
million (before considering any synergies). Intermedia now employs more than
2,800 people, including nearly 600 in sales and sales support, serving
approximately 80,000 business and government customers, with 17 local/long
distance central office switches and nearly 200,000 access line equivalents in
service as of December 31, 1997.
"We continue to add high quality, stable customers and skilled personnel, and we
reinforce our position in several key south-central US markets with this
transaction," commented David C. Ruberg, Intermedia's chairman, president, and
chief executive officer. "The DMS500 switch that LDS placed in service in
Shreveport fits nicely into Intermedia's plan, which called for a switch in
Louisiana during 1998. We welcome these new customers and employees to
Intermedia, and we are excited about the opportunity to offer these customers
the entire portfolio of Intermedia voice and data services."
"The cost synergy that we expect to realize from this transaction, approximately
$8 million in one-time synergy and $4.5 million in recurring cost synergy, will
complement the positive EBITDA that LDS brings to our consolidated operations,"
added Robert Manning, Intermedia's chief financial officer. "We will include LDS
in our reporting beginning in the second quarter of this year."
COMPANY COMMENT ON RECENT STOCK PERFORMANCE
In response to recent fluctuations in the price of its common stock, Intermedia
management reiterated confidence in its business strategy and in the Company's
ability to execute its business plan. The Company believes it has the talent and
resources to meet the continued strong demand for its voice and data services
and to deliver on customer and business partner service expectations. The
Company is comfortable with the equity analysts' consensus estimates for its
1998 revenue and EBITDA, at $750 million and $84 million, respectively.
Management stated, however, that the high level of business activity, including
the recently consummated acquisition of Shared, has reduced its historic level
of visibility at this time into the results for the first quarter. This has
prompted caution on the Company's part with regard to the specifics of the
quarter's projected results. The Company expects to report its quarterly results
during the last week in April, consistent with its traditional reporting
schedule.
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ICIX Closes Acquisition of LDS
Communications Group
Page 3
March 31, 1998
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 Company to successfully implement
its strategies, 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, 1997, and are updated periodically
through the filing of registration statements and reports 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 Communications' 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 Communications is headquartered in Tampa, Florida, with sales offices
in 79 cities. Intermedia Communications is 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 United States. LDS can be
found on the World Wide Web at http://www.ldscommunications.com.
