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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) November 15, 1996
Commission File Number 0-21924
METROCALL, INC.
(Exact name of registrant)
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Delaware 54-1215634
(State of organization) (I.R.S. Employer Identification Number)
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6677 Richmond Highway, Alexandria, Virginia 22306
(Address of principal executive offices and zip code)
(703) 660-6677
(Registrant's telephone Number)
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ITEM 5. OTHER EVENTS
Metrocall, Inc., incorporates herein by reference the information
contained in the press release filed as Exhibit 99 to this Current Report.
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ITEM 7. EXHIBITS
SEQUENTIALLY
EXHIBIT NO. Numbered Page
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99 Press Release by Metrocall, Inc.,
dated November 15, 1996 . . . . . . . . . . . . . . . . . 4
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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 hereunto duly authorized.
METROCALL, INC.
BY: /s/ VINCENT D. KELLY
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Vincent D. Kelly
Chief Financial Officer
Dated: November 15, 1996
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FOR IMMEDIATE RELEASE CONTACT: VINCE KELLY, CHIEF FINANCIAL OFFICER
(703) 660-6677, EXT. 6650 OR
PAUL LIBERTY, VP, INVESTOR RELATIONS
(703) 660-6677, EXT. 6260
URL:HTTP//WWW.METROCALL.COM
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METROCALL COMPLETES A+ NETWORK MERGER
COMPANY CONSUMMATES PRIVATE EQUITY PLACEMENT AND BOND TENDER
November 15, 1996, Alexandria, VA and Nashville, TN.
Metrocall, Inc. (MCLL - NASDAQ NMS) announced today that the Company has
completed its merger with A+ Network, Inc. (ACOM - NASDAQ NMS). The Company
also announced that it has completed a private equity placement with three
financial institutions, SunAmerica, Inc., John Hancock Mutual Life and UBS
Capital LLC, a wholly owned subsidiary of Union Bank of Switzerland, for $39.9
million of Series A Preferred Stock and Warrants. In addition, Metrocall has
completed its offer to purchase for cash substantially all of A+ Network's
Senior Subordinated Notes.
"The merger with A+ Network as well as our equity placement reinforces
Metrocall's position as an industry consolidator and marks the completion of
another significant element of our strategic plan. The capital markets once
again have demonstrated great confidence in Metrocall and the paging industry.
With the completion of this merger, Metrocall is now the fifth largest paging
company with approximately 2.1 million subscribers. The combination with A+
Network as well as our strengthened capital structure positions Metrocall as a
leader in this growth industry," said William L. Collins, III, Chief Executive
Officer and President of Metrocall.
Charles (Chuck) A. Emling, III, President and CEO of A+ Network, who will
become the Regional President of Metrocall's southeastern region added, "We
welcome the opportunity to join forces with Metrocall and its outstanding team.
We look forward to incorporating our distribution capabilities and affiliate
program into Metrocall's national network." Two members of the A+ Network
board of directors, Elliott H. Singer and Ray D. Russenberger, will join
Metrocall's board of directors.
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A+ Network operates in the states of Florida, Georgia, Alabama, North
Carolina, South Carolina, Mississippi, Louisiana, Texas, Tennessee, and
Virginia. Currently, A+ Network has approximately 660,000 paging units in
service. In addition, A+ Network provides Metrocall an equity ownership
position in CONXUS (formally known as PCS Development Corp.), a nationwide
Narrowband Wireless PCS provider.
Metrocall, Inc., headquartered in Alexandria, Virginia, offers paging and
wireless messaging in all 50 states and over 1000 cities through its Nationwide
Wireless Network to its approximately 2.1 million subscribers.
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SUPPLEMENTAL DETAILS
TERMS OF PREFERRED STOCK,
A+ NETWORK BONDS TENDER OFFER,
AND MERGER
Under the terms of the private equity agreement, each Unit, consisting of
one share of Preferred Stock and one warrant, will be issued for a purchase
price of $250. The Preferred Stock carries a dividend of 14%, payable
semi-annually in cash or in additional shares of Preferred Stock at Metrocall's
option. Holders of Preferred Stock will have the right, beginning five years
from the date of issuance, to convert their Preferred Stock (including shares
issued as dividends) into shares of Metrocall's common stock based on the
market price of the common stock at the time. The Preferred Stock is subject
to redemption by holders 12 years from the date of issuance, and to redemption
by Metrocall beginning 3 years from the date of issuance. If Metrocall redeems
the Preferred Stock prior to the fifth anniversary of issuance, it will pay
redemption premiums, if any, sufficient to assure the holders a 25% aggregate
return on the Units if redeemed in the third year or a 20% return if redeemed
in the fourth year. Thereafter, the Preferred Stock can be redeemed for the
redemption price of $250 per share. Holders of the Preferred Stock will have
the right to elect two directors of Metrocall.
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Each warrant will represent the right of the holder to purchase 18.266
shares of Metrocall's common stock, representing an aggregate of 2.915 million
shares. The exercise price per share has been set at $7.40. The warrants
contain certain provisions for adjustment in the exercise price in the event
Metrocall sells common stock or rights to purchase common stock in private
transactions for less than 125% of the then current market price and other
customary anti-dilution provisions. The warrants will expire 5 years from the
date of issuance.
The issuance of Units will not be registered under the Securities Act of
1933, as amended and the Units may not be offered or sold in the United States
absent such registration or an applicable exemption from registration
requirements. The Toronto-Dominion Bank acted as agent on this private
placement.
Additionally, the Company has successfully completed its tender offer and
consent solicitation relating to the "A+ Notes". The tender offer for the A+
Notes expired at 12 midnight on November 14, 1996 and the related consent
solicitation expired at 5 p.m., November 5, 1996. The aggregate principal
amount of the A+ Notes tendered was $122.5 million representing approximately
98% of the aggregate outstanding principal amount of $125 million. Having
received consents from holders representing in excess of a majority of the
outstanding A+ Notes to amend the indenture relating to the A+ Notes, A+
Network, Inc. and the trustee for the A+ Notes have executed a supplemental
indenture. The Company intends to deliver the tender offer consideration and
consent payments to the Depositary for the tender offer today, November 15, and
expects that payments will be made to all tendering and consenting holders by
the Depositary as promptly as practicable thereafter. Toronto Dominion
Securities acted as Dealer Manager and Solicitation Agent on the tender offer
and consent solicitation.
As a result of the merger, A+ Network shareholders will be entitled to
receive 1.17877 shares of Metrocall Common Stock for each A+ Network share. A+
Network shareholders will also receive one indexed variable common right (VCR)
for each Metrocall share they receive. Each VCR represents the right to
receive payment of up to $5 in Metrocall stock or cash, at Metrocall's option,
if the trading price of Metrocall shares at November 15, 1997, is less than a
target price. The target price will be indexed downward, not above the
original target price of $21.10, based on changes in the average trading prices
of Arch Communications Group, Inc., Mobil Media Communications, Inc., and
ProNet, Inc. since the announcement of the merger. If changes in the index
cause the target price to fall below a floor price of $16.10 (which is not
indexed), the VCR payment will be zero regardless of the price at which
Metrocall shares are trading. As of today, the target price is below $16.10,
and no payment on the VCRs would be made if they expired today. No assurances
can be given as to the prices at which Metrocall shares or those in the paging
company index will trade in the future, and, therefore, as to any future values
of the VCRs.
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