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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):
May 30, 1997
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SYLVAN LEARNING SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Maryland 0-22844 52-1492296
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
1000 Lancaster Street
Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip Code)
(410) 843-8000
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(Registrant's telephone number)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 30, 1997, Sylvan Learning Systems, Inc. ("Sylvan") consummated the
previously announced acquisition of privately-held I-R, Inc. and Independent
Child Study Teams, Inc. (collectively, "Educational Inroads") in separate stock
for stock transactions with the two stockholders of Educational Inroads, Dr.
Harold Scholl and Mr. Anthony O'Donnell (the "Stockholders"). Educational
Inroads provides remedial and special education services to public and non-
public school systems, with current contracts in New Jersey, Maryland,
Louisiana, Washington, D.C. and other school districts. Sylvan believes the
acquisition of Educational Inroads will provide Sylvan's Contract Educational
Services division with the critical mass needed for strong long-term growth in
the public and non-public school market in addition to providing expertise in
special education, bolstering Sylvan's capability to serve a wide range of
educational needs. Sylvan has provided educational services under contract to
school districts since 1993. Currently, Sylvan serves more than 22,000 students
in 18 school districts across the United States.
Upon consummation of the mergers, Sylvan issued the Stockholders an
aggregate of 1,414,000 shares of Sylvan Common Stock (the "IR Shares") as the
purchase price for Educational Inroads. The aggregate market price for the IR
Shares is approximately $50.3 million, based on the closing price of the Sylvan
Common Stock on June 9, 1997. Sylvan has agreed to register the IR Shares for
resale by the Stockholders as soon as practicable after August 14, 1997. As a
result of the mergers, Sylvan acquired certain mobile office trailers and
modular buildings owned by Educational Inroads (the "Modular Units"). Sylvan
sold the Modular Units to Mr. O'Donnell immediately after the mergers in return
for a promissory note in the amount of $1,905,481.00, which is payable within 30
days after the effectiveness of the registration of the IR Shares. Following the
mergers, Dr. Scholl will serve as Executive Vice President-Program Development
of Sylvan's Contract Services division, reporting to divisional President, Paula
Singer, and Mr. O'Donnell will serve as a consultant to Sylvan in selected
school districts for the next three months.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired. The financial statements
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of Educational Inroads are not included in this Form 8-K but shall be filed by
amendment to this Form 8-K no later than 60 days after June 14, 1997.
(b) Pro Forma Financial Information. Pro forma financial information
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relative to Educational Inroads are not included in this Form 8-K but shall be
filed by amendment to this Form 8-K no later than 60 days after June 14, 1997.
(c) Exhibits.
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2.1 Agreement and Plan of Reorganization dated as of April 17, 1997 by
and among Sylvan, Educational Inroads, Mr. O'Donnell and Dr. Scholl *
23.1 Consent of Ernst & Young LLP **
99.1 Audited Financial Statements of Educational Inroads **
99.2 Pro Forma Financial Information for the Acquisition **
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* Filed as an Exhibit to and incorporated by reference to Sylvan's Current
Report on Form 8-K dated April 17, 1997 and filed April 30, 1997.
** To be filed by amendment no later than 60 days after June 14, 1997.
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SIGNATURES
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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: June 10, 1997 SYLVAN LEARNING SYSTEMS, INC.
By:/s/ B. Lee McGee
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B. Lee McGee, Senior Vice President
and Chief Financial Officer
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EXHIBIT INDEX
2.1 Agreement and Plan of Reorganization dated as of April 17, 1997 by and
among Sylvan, Educational Inroads, Mr. O'Donnell and Dr. Scholl *
23.1 Consent of Ernst & Young LLP **
99.1 Audited Financial Statements of Educational Inroads **
99.2 Pro Forma Financial Information for the Acquisition **
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* Filed as an Exhibit to and incorporated by reference to Sylvan's Current
Report on Form 8-K dated April 17, 1997 and filed April 30, 1997.
** To be filed by amendment no later than 60 days after June 14, 1997.
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