<PAGE> 1
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 25, 1998
NETWORKS ASSOCIATES, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or other jurisdiction of incorporation)
0-20558 77-0316593
(Commission File No.) (IRS Employer Identification Number)
2805 Bowers Avenue
Santa Clara, California 95051
(Address of Principal Executive Offices)
(408) 988-3832
(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
Item 5. Other Events
Networks Associates, Inc. ("Network Associates") agreed in early March
1998 to acquire Magic Solutions International, Inc. a Delaware corporation
("Magic Solutions"), a privately held provider of internal help desk and asset
management solutions. In the acquisition, a wholly owned subsidiary of Network
Associates will merge with and into Magic Solutions; Magic Solutions will become
a wholly owned subsidiary of Network Associates; and the existing Magic
Solutions stockholders and option holders will receive approximately
$110,000,000 in cash. The acquisition, which is expected to close early in the
second quarter of 1998, is subject to customary conditions to closing including
Magic Solutions stockholder approval.
-2-
<PAGE> 3
Item 7. Financial Statements and Exhibits
(a) Exhibits
2.1 Press Release dated March 24, 1998.
-3-
<PAGE> 4
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 hereunto duly authorized.
NETWORKS ASSOCIATES, INC.
Dated: March 25, 1998 By: /s/ Prabhat K. Goyal
----------------------------------
Prabhat K. Goyal
Chief Financial Officer
-4-
<PAGE> 5
NETWORKS ASSOCIATES, INC.
CURRENT REPORT ON FORM 8-K
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Press Release dated March 24, 1998.
</TABLE>
-5-
<PAGE> 1
EXHIBIT 2.1
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Jennifer Keavney
Network Associates
(408) 346-3278
Margaret Turbeville
Copithorne & Bellows
(415) 975-2253
INVESTOR CONTACT: Michelle Wieber
Network Associates
(408) 346-3152
NETWORK ASSOCIATES TO ACQUIRE MAGIC SOLUTIONS
UNION BRINGS TOGETHER TOP TWO PROVIDERS OF MICROSOFT NT SERVICE DESK SOLUTIONS
SANTA CLARA, Calif., March 24, 1998 -- Network Associates, Inc. (Nasdaq: NETA),
formerly McAfee Associates, and Magic Solutions, Inc. today announced a
definitive agreement pursuant to which Network Associates will acquire Magic
Solutions for cash in a purchase transaction valued at approximately $110
million.
The merger solidifies Network Associates' position as the world's largest
provider of internal help desk applications for the Microsoft NT operating
environment, and the second largest provider of client/server service desk
solutions overall. In addition, the combination creates the largest dedicated
sales and services organization in the internal service desk market. The
combined organizations have more than 200 sales, consulting and service
professionals worldwide, dedicated to supporting current and future customers.
Both companies are market leaders, with products that serve different
segments of the internal help desk market. Magic Solutions pioneered the
internal support market with the introduction of the industry's first packaged
support application in 1988. Today, the company has an installed base of more
than 5,000 organizations, comprised mainly of smaller organizations and
departments within Fortune 1000 companies. The current release of the Magic
Solutions' product, SupportMagic 4.0, is widely recognized for its ease of use,
customization capabilities, and advanced knowledge management tools.
According to market researcher Dataquest, Network Associates' McAfee
ServiceDesk has the largest market share of any comparable product that runs on
the NT platform. By combining
<PAGE> 2
traditional call tracking and problem resolution help desk functionality with
advanced desktop management software, "self-healing" PC technology, and
automated fault analysis and resolution, the McAfee Total ServiceDesk redefined
the help desk market. With this broad functionality, McAfee Total ServiceDesk
has found strong market acceptance, particularly in large organizations with
complex environments.
The combined company's primary product lines, including SupportMagic/SQL and
McAfee Total ServiceDesk, will continue to be sold and supported. In addition,
the companies will combine their development resources to deliver service desk
solutions that combine the ease of use and customization of SupportMagic with
the scalability and enterprise features of McAfee Total ServiceDesk. The
integrated product, which will feature a unified data model, architecture and
user interface, is expected to be released before the end of 1998.
"This substantial investment in the internal help desk market reflects our
commitment to the market and to the customers of both companies," said Zach
Nelson, general manager of Network Associates' Total ServiceDesk Division. "We
continue to expand the Total ServiceDesk solution to create an integrated
application that manages the procurement, deployment, and support of a company's
technology assets. This merger gives us the ability to accelerate our delivery
of this vision while supporting customers on a global basis."
"Magic is a pioneer in this field, and our global market presence is a
testament to the work and dedication of this organization," said Igal Lichtman,
founder, chairman and CEO of Magic Solutions. "Our customers have been asking us
to expand our organization and product line to support their technology
requirements on a larger scale. By joining with Network Associates, we instantly
meet these needs."
The transaction is expected to close in the early part of the second
quarter, 1998.
Under the terms of the agreement entered into in early March, Network
Associates will pay to the Magic Solutions' stock and option holders cash of
approximately $110,000,000. Both boards have approved the merger, and the
companies plan to complete the transaction early in the second quarter of 1998,
subject to approval of Magic Solutions' shareholders, and other customary
closing conditions. In connection with the closing of the proposed transaction,
Network Associates currently expects to incur a charge to earnings related to
the purchase of in-process research and development of approximately $90
million.
<PAGE> 3
Magic Solutions is a leader in providing automated help desk and asset
management solutions to more than 4,500 organizations worldwide. A pioneer in
the fast-growing support industry, Magic Solutions is dedicated to developing,
marketing and supporting software solutions that improve customer satisfaction
and end-user productivity, while driving down the total cost of support. The
company has a strong presence in the healthcare, government, financial services,
computer, and manufacturing sectors, as well as across the world.
With headquarters in Santa Clara, Calif., Network Associates, Inc., (Nasdaq:
NETA), formed by the merger of McAfee Associates and Network General, is a
leading supplier of enterprise network security and management solutions.
Network Associates' product offering includes four individual software suites,
McAfee Total Virus Defense, PGP Total Network Security, Sniffer Total Network
Visibility, and McAfee Total ServiceDesk, which can be centrally managed from
within Network Associates' Net Tools unified management environment. For more
information, Network Associates can be reached at (408) 988-3832 or on the Web
at http://www.nai.com.
###
This news release contains forward-looking statements within the meaning of
Section 28A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including with respect to the
consumation of the merger, and the introduction of an integrated product, and
the amount of charges related to the proposed transaction. Because such
statements apply to future events, they are subject to risks and uncertainties
that could cause the actual results to differ materially, including without
limitation, integration risks related to the proposed transaction and the risk
that the proposed transaction will not be consummated, and the risks that the
anticipated benefits of the transaction will not be realized. Important factor
which could cause actual results to differ materially are descried in Network
Associates' report on Form 10-K and 10-Q filed with the Securities and Exchange
Commission.
