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
December 30, 1997
Date of Report (Date of earliest event reported)
AMERICAN MOBILE SATELLITE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23044 93-0976127
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10802 Parkridge Boulevard, Reston, Virginia 20191-5416
(Address of principal executive offices) (Zip Code)
(703) 758-6000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
In addition to historical information, this Form 8-K Current Report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The
forward-looking statements contained herein are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
reflected in the forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which reflect management's
analysis only as of the date hereof. The Company undertakes no obligation to
publicly revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof. Readers should carefully review
the risk factors described in other documents the Company files from time to
time with the Securities and Exchange Commission, including the Form 10-K annual
Report and Form 10-Q Quarterly Reports filed by the Company prior to this Form
8-K filed by the Company.
On December 30, 1997, the Company entered into a Bridge Loan Agreement ("Bridge
Loan") with Hughes Communications Satellite Services, Inc. ("Hughes") in the
principal amount of up to $10 million, secured by a pledge of the Company's
interest in its 80%-owned subsidiary, AMRC Holdings, Inc. The Bridge Loan bears
an annual interest rate of 12% and a maturity date of March 31, 1999, and
requires mandatory repayment in the event net proceeds are received from any
asset disposition, lease agreement, financing or equity transaction of the
Company. The Bridge Loan also includes a number of conditions precedent to each
borrowing thereunder, including a schedule for permitted borrowings through
February 1998.
On December 31, 1997, the Company entered into a Stock Purchase Agreement with
Motorola, Inc. ("Motorola"), for the acquisition of ARDIS Company ("ARDIS"), a
Motorola subsidiary that owns and operates a two-way wireless data
communications network. Subject to certain purchase price reduction provisions,
the Company would acquire ARDIS for a purchase price of $50 million in cash and
$50 million in the Company's stock and warrants (the "Purchase Price Shares").
The transaction is subject to governmental approvals, including FCC approvals to
transfer the ARDIS licenses to the Company, and is subject to the completion of
a financing by the Company in an amount sufficient to fund the transactions
contemplated under the Stock Purchase Agreement, including the operations of the
Company following the acquisition.
ARDIS' system currently provides wireless data service to approximately 100
commercial users, representing approximately 56,000 mobile users. The ARDIS
network serves the top 425 metropolitan areas in all 50 states, Puerto Rico, and
the U.S. Virgin Island. The current annualized revenue of ARDIS is approximately
$36 million.
Upon issuance of the Purchase Price Shares to Motorola, it is anticipated that
Motorola would be the second largest stockholder of the Company, holding 19.95%
of the Company's outstanding common stock. Under the terms of the Stock Purchase
Agreement and the related Registration and Participation Rights Agreements
entered into with Motorola, Motorola has agreed not to sell the Purchase Price
Shares for one-year following closing on the acquisition, subject to certain
piggy-back and tag-along exceptions. In addition, under those agreements, the
Company agreed to provide Motorola certain demand registration rights and
piggy-back registration rights, and certain of the Company's existing
stockholders have agreed to subordinate their demand and piggy-back registration
rights to those of Motorola, under certain circumstances. The Company and
Motorola have not entered into any agreements with respect to corporate
governance including board membership.
<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 hereunto duly authorized.
AMERICAN MOBILE SATELLITE CORPORATION
(Registrant)
Date: January 5, 1998 /s/RANDY S. SEGAL
Randy S. Segal
Secretary
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
99.16 -- American Mobile Satellite Corporation Press Release No. 97-#24 dated
December 31, 1997 (filed herewith).
Reference: 97-#24
FOR IMMEDIATE RELEASE
AMERICAN MOBILE SATELLITE REACHES AGREEMENT TO ACQUIRE
ARDIS MOBILE DATA SUBSIDIARY FROM MOTOROLA
Combination Forms Seamless Satellite/Terrestrial Wireless Data Network
RESTON, VA, and SCHAUMBURG, IL, December 31, 1997--American Mobile Satellite
Corporation (NASDAQ: SKYC) and Motorola, Inc., (Motorola) (NYSE: MOT) today
announced a definitive agreement whereby American Mobile will acquire Motorola's
ARDIS data messaging business, which owns and operates the nation's first and
largest two-way wireless data communications network. When the acquisition is
complete, American Mobile will become one of the country's largest providers of
mobile data services to the transportation and field services industries, as
well as others that rely heavily on mobile communications. The American Mobile
network will offer the only combined satellite/terrestrial data capability for
least-cost routing of data messaging. The transaction is contingent upon
governmental approvals, and is expected to be completed during the first quarter
of 1998.
"This is an extraordinarily exciting time for wireless data services,
with a long-projected emergence of new applications and customers beginning
to take hold," said Gary M. Parsons, president and chief executive of
American Mobile. "New, attractively priced pagers, modems and terminal
equipment designed for the ARDIS network, combined with recent new customer
contracts, convinced us that the growth prospects for ARDIS, and the wireless
data industry in general, are outstanding. Further, the combination of our
companies' data offerings creates a critical mass, coverage area, and breadth
of services that is unmatched in the industry."
The ARDIS wireless data network covers more than 425 of the top cities in
the US, Puerto Rico, and the US Virgin Islands. Transmissions easily penetrate
buildings, providing wireless data communications not otherwise possible in
urban areas. The ARDIS network complements American Mobile's existing satellite
communications technology, the first of its kind to provide mobile data and
voice dispatch services in remote areas under served by ground-based networks.
American Mobile and Motorola have partnered in the past, with American
Mobile's Multi-mode Messaging Service employing the ARDIS network as one of its
transmission pathways.
"Our customers have long told us the most important attributes of a
wireless service provider are coverage and breadth of product offerings," said
Walt Purnell, president and chief executive officer of ARDIS. "The integration
of ARDIS with American Mobile, while providing both voice and data solutions,
also enables the joint entity to become the `100% coverage company.' The timing
is ideal as it enables this robust set of customer solutions to converge with
recent increases in customer demand." "Motorola is pleased with this transaction
from the standpoint of advancing the wireless data industry," said Dominic
Layden, general manager of the North America Network Division of Motorola's
Information Products and Services Group. "Motorola has been successful in
creating and investing in new markets. And, consistent with our long-term
strategy in the US, we continue to focus our efforts on providing new technology
and equipment manufacturing, rather than on operating network systems." American
Mobile Satellite Corporation provides a wide range of mobile communications
services, including telephone, digital voice dispatch, data communications,
mobile messaging and position reporting services. The company's shareholders
include Hughes Communications, Inc.; Singapore Telecom; and AT&T Wireless
Services, Inc.
Motorola is one of the world's leading providers of wireless
communications, semiconductors, and advanced electronic systems, components, and
services. Major equipment businesses include messaging, paging, and data
communications, cellular telephone, two-way radio, personal communications,
automotive, defense and space electronics, and computers. Motorola
semiconductors power communication devices, computers, and millions of other
products. Motorola's 1996 sales were $28 billion.
###
Factors that could cause forward-looking statements in this news release to
differ materially from actual results are discussed in American Mobile Satellite
Corporation's S-1 registration statement; Form 10K for the year ended December
31, 1996; Form 10Q for the quarter ended September 30, 1997 and other periodic
filings the company has made with the Securities and Exchange Commission. Copies
of the filings are available upon request from American Mobile Satellite
Corporation's investor relations department.
American Mobile Press Contact:
Orly Konig Lopez
703-716-6522
[email protected]
Renate Brown Neely
703/716-6558
[email protected]
ARDIS Contact:
Naomi Yeransian
847-913-4233
[email protected]
Motorola Contact:
Albert Lopez
847/538-2080
[email protected]
