<PAGE>
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):
January 12, 2000
_______________________________________________________________________________
Intermedia Communications, Inc.
(Exact name of registrant as specified in its charter)
_______________________________________________________________________________
Delaware 59-2913586
-------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
0-20135
-------
(Commission File Number)
3625 Queen Palm Drive
Tampa, FL 33619
(Address of principal executive offices)
(813) 829-0011
(Telephone Number)
<PAGE>
ITEM 5. Other Events
On January 12, 2000, Intermedia Communications, Inc. (the "Company") issued
the attached press release.
ITEM 7. Financial Statements and Exhibits
Exhibit 99 Press Release, dated January 12, 2000.
<PAGE>
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.
Dated: January 12, 2000
INTERMEDIA COMMUNICATIONS, INC.
(Registrant)
/s/ Robert M. Manning
---------------------
Robert M. Manning
Senior Vice President and Chief Financial Officer
EXHIBIT INDEX
Exhibit
No. Description Page
99 Press release dated January 12,2000
<PAGE>
Exhibit 99
Intermedia Contacts:
Curtis Lightburn
Vice President, Investor Relations
813-829-2408
[email protected]
--------------------------
Alan Hill
Director, Public Relations
813-829-4409
[email protected]
---------------------
KKR Contact: Ruth Pachman/Molly Morse
Kekst and Company
212-521-4800
[email protected]
----------------------
[email protected]
---------------------
KKR, COMPAQ, MICROSOFT, AND CONSORTIUM OF BANKS TO PROVIDE
INTERMEDIA COMMUNICATIONS WITH UP TO $700 MILLION IN STRATEGIC FINANCING
TAMPA, FL, January 12, 2000 - Intermedia Communications Inc. (NASDAQ: ICIX), a
leading nationwide integrated communications provider, announced today that
Kohlberg Kravis Roberts & Co. (KKR), Compaq Computer Corporation (NYSE: CPQ),
Microsoft Corporation (NASDAQ: MSFT), and a consortium of banks have agreed to
provide Intermedia with up to $700 million in strategic financing. These
commitments include:
. a $200 million equity investment by an affiliate of KKR;
. a $100 million strategic investment from Compaq and Microsoft in
Intermedia's 81%-owned subsidiary Digex Inc. (NASDAQ: DIGX); and
. a $400 million bank facility commitment led by Bank of America, The Bank of
New York and Toronto Dominion.
"We believe that Intermedia is the prototype for successful communications
companies in the 21st century," said David C. Ruberg, Intermedia's President,
Chairman, and Chief Executive Officer. "These investments from KKR, Compaq, and
Microsoft, and the commitment from our bank lenders, speak volumes about the
current and future value of our business. We are committed to leveraging our
core competencies in data, Internet, and integration services to lead the
development and delivery of next generation communications services."
The capital from the KKR investment and the bank facility will be used to fund
Intermedia's strategy to become the nation's premier, single source
communications provider by expanding its services and network. These commitments
are subject to customary closing conditions. The Compaq and Microsoft investment
in Digex will be used to fund a joint research and development project to build
and deploy next generation web and application hosting capabilities.
"KKR is one of the most highly respected investment firms in the world, and its
commitment to Intermedia is a particularly strong endorsement of our strategy to
become the premier single source, integrated communications provider in the
United States," said Mr. Ruberg.
KKR's $200 million investment will be in the form of a convertible preferred
stock with a conversion price of $36 per share. The preferred stock will carry a
7% dividend payable in cash or Intermedia common stock at Intermedia's option.
Under the agreement, KKR will also receive one million four-year warrants to
purchase Intermedia common stock at $40 per share and an additional one million
four-year warrants for purchase of common stock at $45 per share. KKR's
investment is expected to close in February 2000.
Upon the closing of the KKR investment, James H. Greene, Jr. and Alex Navab of
KKR, both of whom have responsibility for KKR's telecommunications industry
investments, will join Intermedia's Board of Directors.
<PAGE>
The Company also announced that Ralph J. Sutcliffe, a senior partner at Kronish
Lieb Weiner & Hellman LLP, was appointed to its board on January 5, 2000. At
the closing of the KKR investment, Intermedia's board will have seven members.
"We believe the addition of these seasoned professionals to our board will
strengthen our ability to succeed going forward," said Mr. Ruberg. He added
that holders of the Intermedia outstanding Series B Preferred Stock under
certain circumstances may be entitled to elect an additional member to the
board.
Mr. Greene, Partner of KKR, said, "Intermedia's strong management team, state-
of-the-art nationwide network, and broad product offering ideally position the
Company for significant growth in a rapidly expanding marketplace. The Company
is well-positioned to create value for its customers and shareholders alike as
it capitalizes on its technological leadership in a dynamic marketplace. We
look forward to partnering with David Ruberg and his management team to help
Intermedia expand and realize its growth plans."
Compaq and Microsoft are each investing $50 million in Digex to fund a research
and development project to develop and deploy next generation application
hosting capabilities. Details of the Digex transaction are outlined in a
separate Digex press release.
The $400 million bank facility commitment is from Bank of America, N.A., The
Bank of New York, and Toronto Dominion (Texas), Inc. for a secured revolving
credit facility and term loan for up to $400 million and an option to request a
secured incremental credit facility of up to an additional $400 million. One
hundred million dollars of the commitment was closed in December 1999. The full
$400 million facility, which will replace the $100 million facility, is expected
to close in March 2000.
Bear, Stearns & Co. Inc. acted as financial advisor to Intermedia and Digex in
these transactions and KKR was advised by Morgan Stanley Dean Witter.
As a part of its strategy to deleverage its balance sheet, Intermedia intends to
sell a portion of its equity interest in Digex to the public. Digex expects
shortly to file a registration statement with the Securities and Exchange
Commission covering approximately 10 million shares of Class A Common Stock of
Digex, most of which is expected to be sold by Intermedia.
About Intermedia
- ----------------
Intermedia Communications is one of the nation's fastest growing communications
companies and is focused on the next generation of integrated, data-centric
solutions for business customers. Intermedia's unique perspective on the
dynamic business communications marketplace allows it to tailor a suite of
video, voice, data and advanced network services to the individual needs of
approximately 90,000 businesses nationwide.
Intermedia has focused on building out its nationwide data, Internet and frame
relay network as well as leveraging DSL (Digital Subscriber Line) technology to
deliver high performance, integrated services. Intermedia has also entered into
key synergistic sales partnerships with leading telecommunications companies,
including Bell Atlantic, Ameritech, USWest, and NTT.
<PAGE>
Intermedia's enhanced data portfolio includes the densest frame relay network
available, optical networking, a full range of business Internet connectivity
and web hosting services and offers seamless end-to-end service to virtually
anywhere in the world. Intermedia is headquartered in Tampa, Florida and can be
found at www.intermedia.com.
About KKR
- ----------
KKR is a private investment firm with offices in New York City, London, and
Menlo Park, California. Recent communications industry investments include
RELTEC Corporation, Amphenol Corporation, Birch Telecom, Inc. and Zhone
Technologies, Inc. KKR also signed a definitive investment agreement with CAIS
Internet in December 1999.
Forward Looking Statements
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 and Digex's services, and the ability of Intermedia and Digex 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
Intermedia Form 10-K Annual Report for its fiscal year ended December 31, 1998,
and the Digex Prospectus dated July 29, 1999. These and other applicable risks
are updated periodically through the filing of reports and registration
statements with the Securities and Exchange Commission.
INTERNET USERS: Intermedia news releases, investor contacts and other useful
information are available on Intermedia's website at www.intermedia.com . To
receive news releases by e-mail or to request that information be mailed to you,
please visit the Investor Relations section of our website, and go to the
"Request Information" link.
# # #
