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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 12, 1998
AT&T CAPITAL CORPORATION
A Delaware Commission File I.R.S. Employer
Corporation No. 1-11237 No. 22-3211453
44 Whippany Road, Morristown, New Jersey 07962-1983
Telephone Number (973) 397-3000
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Form 8-K January 12, 1998
Item 1. CHANGES IN CONTROL OF THE REGISTRANT
Item 5. OTHER EVENTS
On January 12, 1998, Newcourt Credit Group Inc., an Ontario corporation
("Newcourt"), consummated the purchase (the "Purchase") of all of the
outstanding shares of common stock, par value $.01 per share (the "Common
Stock"), of AT&T Capital Corporation ("AT&T Capital" or the "Company"), pursuant
to a Stock Purchase Agreement dated as of November 17, 1997 among Newcourt,
Hercules Holdings (Cayman) Limited ("Hercules (Cayman)"), the former direct
owner of approximately 97.4% of the Company's outstanding shares of Common
Stock, the Company, and the other former stockholders of the Company (which
Stock Purchase Agreement previously was filed as Exhibit A to the Company's
Form 8-K dated November 19, 1997). In connection with the Purchase, all of the
outstanding shares of Common Stock of the Company were transferred to Newcourt
Holdings USA, Inc., a newly-formed Delaware corporation which is a wholly-owned
subsidiary of Newcourt. As a result of the Purchase, all of the outstanding
shares of Common Stock of the Company are owned indirectly by Newcourt.
The aggregate purchase price paid by Newcourt to the former stockholders
of AT&T Capital for the Common Stock so purchased was US$1.03 billion in cash
and approximately 17.6 million Newcourt common shares. Such shares were issued
entirely to Hercules (Cayman) and generally may not be transferred for periods
ranging from 6 to 18 months following the date of the Purchase. The cash portion
(US$1.03 billion) of the purchase price paid by Newcourt was raised through the
issuance by Newcourt of approximately 38 million shares of Newcourt common stock
at approximately US$32.50 (C$46.00) per share to employees of Newcourt and the
public in Canada and the United States.
Newcourt has advised the Company that Newcourt intends for the Company
to operate as an indirect wholly-owned subsidiary of Newcourt which will
continue to issue commercial paper and medium and long-term debt in the public
markets. Newcourt has also advised the Company that Newcourt intends for
Newcourt and the Company on a consolidated basis to securitize approximately
40-45% of their new consolidated volumes and to move to a consolidated debt to
tangible equity ratio in the range of approximately 5:1 to approximately 6:1,
with the result that the securitization and leverage policies of the Company
will be adjusted to achieve those targets over time.
Newcourt has also advised the Company that, in connection with the
Purchase, Newcourt intends to either provide a guarantee for certain classes of
outstanding indebtedness for borrowed money of the Company or enter into a
support agreement with the Company for the benefit of the holders of such
certain classes of indebtedness. In addition, the Company intends to guarantee
certain outstanding indebtedness and liquidity facilities of Newcourt. As of
September 30, 1997, Newcourt's outstanding indebtedness for borrowed money
aggregated US$ 1.87 billion (C$2.58 billion). The ownership of the
US$200 million Trust Originated Preferred Securities, which were issued by
Capita Preferred Trust, a business trust originated by the Company in October,
1996, was not affected by the Purchase.
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Form 8-K January 12, 1998
Upon the Purchase, John Appleton, James Babcock, Max Chapman, Guy Hands,
Ray Hart, Djomko Iwai and Joseph Melone resigned as members of the Company's
Board of Directors. Following the Purchase, the Board of Directors of the
Company was reduced from nine members to two members with Steven K. Hudson, the
Chief Executive Officer of Newcourt, and David A. Banks being respectively
elected and re-elected as members of the Company's Board of Directors.
Prior to the Purchase, all of the outstanding shares of Common Stock of
the Company were owned either (i) indirectly, through ownership of 100% of the
common shares of Hercules (Cayman), by The Grand Leasing Company Limited (UK)
("Grand Leasing"), which in turn is beneficially owned through warrants to
acquire 100% of the common shares of Grand Leasing by Nomura International plc
("Nomura"), a wholly-owned indirect subsidiary of The Nomura Securities Co.,
Ltd. ("Nomura Securities"), and (ii) directly, by 21 members and one former
member of the senior management of the Company (the "Management Stockholders"),
with the Management Stockholders owning directly approximately 2.6% of the
outstanding shares of Common Stock of the Company (or approximately 4.7% on a
fully diluted basis) and Grand Leasing owning indirectly approximately 97.4% of
the outstanding shares of Common Stock of the Company (or approximately 93.6% on
a fully diluted basis). The Company's employees and outside directors owned
approximately 1.7% of the Common Stock on a fully-diluted basis.
After giving effect to, and as a result of, the Purchase, approximately
17.6 million common shares of Newcourt or approximately 12.67% of the
outstanding common shares of Newcourt (12.31% on a fully diluted basis) are
owned directly by Hercules (Cayman) and indirectly, as described above, by
Nomura. Canadian Imperial Bank of Commerce ("CIBC"), the second largest bank in
Canada in terms of assets, separately owns approximately 8.8 million common
shares of Newcourt or approximately 6.33% of the outstanding common shares of
Newcourt (6.15% on a fully diluted basis), which shares were acquired by CIBC in
1997. In addition, Capital Research and Management Company, Inc., a mutual
fund, owns approximately 11.3 million common shares of Newcourt or
approximately 8.15% of the outstanding common shares of Newcourt (approximately
7.92% on a fully diluted basis); the AIC Group of Funds, a mutual fund manager,
owns approximately 10.8 million common shares of Newcourt or approximately 7.74%
of the outstanding common shares of Newcourt (approximately 7.52% on a fully
diluted basis); and Mutual Life Assurance Company of Canada ("Mutual Life"), one
of the largest life assurance companies in Canada, owns approximately 3.1
million common shares of Newcourt or approximately 2.21% of the outstanding
common shares of Newcourt (approximately 2.15% on a fully diluted basis).
Hercules (Cayman), CIBC, Mutual Life and certain investment entities controlled
by certain management shareholders of Newcourt (Mr. Hudson, David D. McKerroll
and Bradley D. Nullmeyer, each of whom currently serves as a director of
Newcourt) have agreed to vote the common shares of Newcourt owned by them so as
to elect as members of Newcourt's Board of Directors two (2) nominees selected
by each of Hercules (Cayman), CIBC and Mutual Life and three (3) nominees
selected by such management shareholders, subject to certain statutory and
contractual restrictions (including, without limitation, the requirement that
a majority of the Board of Directors shall be independent directors selected and
approved by the Nominating Committee of Newcourt's Board of Directors). In
addition, Hercules (Cayman), CIBC and Mutual Life each have certain contractual
rights involving material credit and investment decisions of Newcourt.
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Form 8-K January 12, 1998
When included in this Current Report on Form 8-K, the words, "will",
"should", "expects", "intends", "anticipates", "estimates" and similar
expressions, among others, identify forward looking statements for purposes of
Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A
of the Securities Act of 1933, as amended. Such statements which include
statements contained in this Current Report inherently are subject to a variety
of risks and uncertainties that could cause actual results to differ materially
from those set forth in such statements. Such risks and uncertainties, many of
which are beyond the control of AT&T Capital, include, among others, those
described under "Risk Factors" included in Item 7 of the Company's 1996 Annual
Report on Form 10-K. These forward looking statements are made only as of the
date of this Current Report on Form 8-K. The Company expressly disclaims any
obligation or undertaking to release any update or revision to any forward
looking statement contained herein to reflect any change in the Company's
expectations with regard thereto or any change in events, conditions or
circumstances on which any statement is based.
The joint press releases of Newcourt and the Company are attached hereto
as Exhibits 99(a) and 99(b) are incorporated herein by reference.
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Form 8-K January 12, 1998
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99(a) Press Release issued by Newcourt and the Company
dated January 12, 1998 regarding closing of AT&T
Capital acquisition.
99(b) Press Release issued by Newcourt and the Company dated
January 12, 1998 regarding Newcourt guarantee or support
of AT&T Capital debt.
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Form 8-K January 12, 1998
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.
AT&T CAPITAL CORPORATION
RAMON OLIU, JR.
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By: Ramon Oliu, Jr.
Senior Vice President and
Chief Financial Officer
January 26, 1998
STATEMENT OF DIFFERENCES
The British pound sterling sign shall be expressed as......................'L'
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Form 8-K January 12, 1998
EXHIBIT INDEX
Exhibit
99(a) Press Release issued by Newcourt and the Company
dated January 12, 1998 regarding closing of AT&T
Capital acquisition.
99(b) Press Release issued by Newcourt and the Company dated
January 12, 1998 regarding Newcourt guarantee or support
of AT&T Capital debt.
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Exhibit 99(a)
AT&T Capital Corporation
Newcourt closes AT&T Capital acquisition
Integration plan set in high gear, changes made to structure, management and
Board
For immediate release: Monday, January 12, 1998
Toronto, Canada, January 12, 1998 - Newcourt Credit Group today
confirmed that it has closed the transaction to acquire all of the outstanding
common shares of AT&T Capital Corporation. On November 17, 1997, the two
companies announced they had entered into an agreement to combine their
operations to create one of the world's largest asset finance companies.
With corporate headquarters in Toronto, Canada, the combined company has
over C$29.2 billion (US$20.7 billion, 'L'12.2 billion) in owned and managed
assets and more than 5,000 employees operating from 65 offices in 24 countries.
The company provides financing to more than 600,000 customers through over 300
vendor finance relationships.
"Combining the operations of Newcourt and AT&T Capital creates a global
leader in the commercial finance and corporate finance sectors serving a blue
chip client base with some of the most advanced systems available in the
industry," noted Steven K. Hudson, CEO of the combined enterprise.
The combined company will provide asset financing services to its
clients through three operating businesses. The Commercial Finance Business will
have its headquarters in New Jersey with a major presence in Toronto, Canada.
Through its vendor focus, this business will provide commercial finance to a
large number of customers worldwide such as Lucent Technologies and Dell
Computers. Bradley D. Nullmeyer will serve as President of the Commercial
Finance Business.
The Corporate Finance Business, with its headquarters based in Toronto,
Canada will provide structured corporate finance to a growing roster of major
international clients. This business will finance the acquisition of capital
assets such as aircraft, rolling stock and telecommunications installations as
well as infrastructure financing for the corporate and public sectors. David D.
McKerroll will serve as President of the Corporate Finance Business.
To meet the underwriting, funding, administration and risk management
needs of the Commercial Finance and Corporate Finance operations, the company's
Services Business will be headquartered in New Jersey with significant
activities located in Toronto, Canada. The Services Business will provide a
range of corporate services from tax planning and treasury, to financial
reporting and credit. Daniel A. Jauernig will serve as President of the Services
Business in addition to being the company's Chief Financial Officer. In carrying
out his responsibilities, Mr. Jauernig will work closely with Glen Votek, EVP -
Treasurer, and Michael DeBernardi, EVP - Credit and Risk Management.
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One of the principal benefits resulting from this alliance is the
combination of Newcourt's proven origination capability with AT&T Capital's
global distribution network. This network will be engaged immediately to provide
world-wide support to several of Newcourt's major vendor finance programs
including its joint venture with Dell Computer Corporation.
"To focus this global network on serving the needs of these major
customers, I am very pleased that David Sharpless, the chairman of Dell
Financial Services, has agreed to also take on full-time responsibilities for
the international activities of the Commercial Finance Business," noted Mr.
Hudson.
"Significant benefits, in terms of serving our customers and creating
value for our shareholders, have already been realized from the early
integration of Newcourt's powerful origination capabilities with AT&T Capital's
global reach. I am looking forward to accelerating this process," said Mr.
Sharpless.
As a result of this acquisition and the new responsibilities assumed by
Mr. Sharpless, the Board of Directors will be asked to make certain changes. In
addition to his new executive duties, Mr. Sharpless will be appointed to the
position of Deputy Chairman assisting in matters of corporate governance. At the
same time, David Banks, the current CEO of AT&T Capital, will join the Board as
its Chairman. Also joining the Board will be Takumi Shibata, President of Nomura
International plc, and Guy Hands, Managing Director of Nomura International's
Principal Finance Group, representing Hercules Holdings.
"I am very pleased that David Banks has agreed to take on the role of
Chairman of the combined company. His background and experience in international
finance as well as his achievements since joining AT&T Capital in building new
business relationships and initiating cost reductions will add great value as we
move forward with the integration of the two companies," noted Mr. Hudson.
David Banks was appointed Chief Executive Officer of AT&T Capital in May
1997. Prior to this, he was a private investor involved in a number of ventures
and acted as a special advisor to Nomura International plc. His career in
international finance and marketing spans 29 years during which time he served
in various senior management positions for The Chase Manhattan Bank, Carlyle
Banks & Company, Continental Grain Company and The General Atlantic Group.
The process of integrating the operations of Newcourt Credit Group and
AT&T Capital was initiated immediately following last November's acquisition
announcement. Since that time, the companies have been working through key
issues such as operating structures and primary business office locations. An
Integration Office, with six senior management members, was established to lead
and manage the work of 12 dedicated integration task forces comprised of more
than 60 individuals selected from amongst the employees at both companies. The
full integration of the two companies is expected to take between 12 and 18
months.
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"Since the agreement with Newcourt was announced last November, both
companies have worked non-stop to put the information and resources in place to
get the integration process off to a quick and effective start," said Mr. Banks.
"The integration task forces will provide the focus and discipline needed to
drive that process and ensure that it stays on course, on budget and on
schedule."
"With the closing of this transaction the integration process moves into
high gear to begin the important work of putting the resources of these two
industry leaders together into one world-class enterprise," added Mr. Hudson. "I
am very pleased to announce that Paul Currie has joined the company as Executive
Vice President and will lead the integration process. His appointment will
ensure that the overall operations of the combined enterprise are fully focused
on serving the needs of our customers and are cost effective." Borden Rosiak,
Executive Vice President, has joined the company's Executive Office and will
work closely with the Integration Office as well as immediately assuming other
corporate initiatives as directed by Mr. Hudson.
"I am looking forward to this exciting challenge and to working with the
management of both companies to help create the framework for one of the world's
leading asset finance organizations," said Mr. Currie. "The structure of this
new enterprise will be designed to maximize the tremendous resources that each
company brings to the alliance, creating a true powerhouse in the global market
for commercial and corporate asset-based financing."
Prior to joining Newcourt, Mr. Currie spent eight years with Coopers &
Lybrand as a Senior Partner in the company's Financial Advisory Services Group.
He has been involved in a large number of merger, acquisition, divestiture and
reorganization projects in a variety of sectors including commercial banking,
mutual funds, investment banking, real estate and the public sector.
While with Coopers & Lybrand, Mr. Currie was responsible for the
creation of a unique joint venture enterprise between Royal Bank, Bank of
Montreal and Toronto Dominion Bank that combined certain operations involving
4,000 staff at 23 sites. Other accomplishments include the privatization of the
CN Tower and leadership on the team restructuring Olympia and York. Most
recently, Mr. Currie was Chief Executive Officer of the Privatization
Secretariat for the Ontario Government.
The combination of Newcourt Credit Group and AT&T Capital creates one of
the world's leading sources of asset-based financing serving the corporate,
commercial and institutional markets with owned and managed assets of C$29.2
billion (US$20.7 billion, 'L'12.2 billion) at September 30, 1997, and a
global distribution capability in 24 countries.
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Exhibit 99(b)
AT&T Capital Corporation
Newcourt to Guarntee or Support AT&T Capital Debt
For immediate release: Monday, January 12, 1998
In a separate announcement earlier today, Newcourt Credit Group
announced that it has closed the transaction to acquire all of the outstanding
common shares of AT&T Capital Corporation. In connection with that announcement,
Newcourt also said today that it intends to either provide a guarantee for
certain classes of outstanding indebtedness for borrowed money of AT&T Capital
or enter into a support a agreement with AT&T Capital for the benefit of the
holders of certain classes of outstanding indebtedness for borrowed money of
AT&T Capital.
