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UNITED STATES
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
August 23, 1999
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Date of Report (Date of earliest event reported)
TRANSACTION NETWORK SERVICES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-23856 54-1555332
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File No.) Identification No.)
1939 Roland Clarke Place, Reston, Virginia 20191
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(Address of principal executive offices and zip code)
(703) 453-8300
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Transaction Network Services, Inc. announced that it has entered into an
agreement to be acquired by PSINet Inc. Attached as Exhibit 99.1 is a press
release issued by PSINet Inc. and Transaction Network Services, Inc. dated
August 23, 1999, which is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Not applicable.
(b) Not Applicable.
(c) Exhibits.
99.1 Press Release Dated August 23, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TRANSACTION NETWORK SERVICES, INC.
Dated: August 23, 1999 By: /s/ Henry H. Graham, Jr.
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Henry H. Graham, Jr.
Chief Financial Officer
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Exhibit 99.1
PSINET WILL HOST A PRESS BRIEFING BY TELEPHONE AUGUST 23, AT 1:00 P.M. U.S. EDT.
THOSE INTERESTED IN PARTICIPATING SHOULD CALL 1-800-230-1092 NO LATER THAN 12:55
P.M.
FOR PSINET: FOR TNS:
MEDIA CONTACTS: ANALYST CONTACT: MEDIA/ANALYST CONTACT:
Robert Leahy David Lerch Karen Kazmark
(703) 375-1063 (703) 375-1577 (703) 453-8406
[email protected] [email protected] [email protected]
REID WALKER
(703) 375-1103
[email protected]
PSINET TO ACQUIRE TRANSACTION NETWORK SERVICES, INC.
GLOBAL ECOMMERCE AND INTERNET SERVICE POWERHOUSE CREATED
HERNDON, VA, AUGUST 23, 1999 - PSINet Inc. (NASDAQ: PSIX), the first and largest
independent facilities based commercial Internet Service Provider (ISP), today
announced it had entered into a definitive agreement to acquire Transaction
Network Services, Inc. (NYSE: TNI). TNI, headquartered in Reston, Virginia, is
the leading worldwide provider of eCommerce data communications processing more
than 20 million transactions per day from 2 million businesses. The company
handles over 70 percent of the electronic Point of Sale transactions in the U.S.
During its quarter ended June 30, 1999, TNI reported revenue of $42.7 million,
EBITDA of $10.5 million and a net profit of $3.1 million.
The purchase of TNI is expected to be immediately accretive to PSINet's EBITDA
and EPS measures. The $720 million aggregate purchase price consists of $351
million in cash and up to 7.8 million PSINet common shares. TNI shareholders may
elect to receive cash, PSINet stock, or both. The stock portion of the
transaction has been designed to achieve tax-free treatment for federal income
tax purposes.
TNI operates the leading data transport network used by credit card processors
in the U.S. to carry account and purchase information between merchants and the
processors' data centers for authorization. TNI is a leader in processing
transactions over the Internet, and has experienced a 20 percent growth rate per
month in transaction volumes in 1999.
"We are very excited to welcome TNI to the PSINet global family of companies,"
said William L. Schrader, PSINet chairman and CEO. "This transaction represents
the first combination of a market-leading eCommerce enterprise with a global
facilities-based Internet service provider. Combining PSINet and TNI creates the
leading global provider of eCommerce and Internet solutions to businesses
worldwide, and enables PSINet to better access the $1 trillion marketplace for
eCommerce services."
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TNI currently has operations in Ireland, the UK, Sweden, France, Australia, and
Japan and is expanding its business worldwide. The purchase by PSINet will allow
TNI to greatly expand its international reach of services while operating over
PSINet's global backbone.
"PSINet's global reach significantly enhances TNI's market presence by
immediately adding 16 global markets for their services. As financial
institutions continue to outsource their critical web hosting capabilities to
both TNI and PSINet, we can exploit this vertical marketplace by providing
end-to-end solutions over our worldwide network," said Schrader.
"TNI is known for its ability to deliver leading edge technology to its
customers as they expand their businesses. It is clear that virtually all of our
customers are playing an increasing role in the electronic commerce space," said
John McDonnell Jr., president and CEO of Transaction Network Services. "TNI is
committed to providing an innovative transport infrastructure to support them as
they move their businesses forward. We see this acquisition by PSINet as a
strategic way for TNS to meet that objective."
Shareholders representing approximately 15 percent of TNI's outstanding shares
(including those of McDonnell) have entered into an agreement to vote their
shares in favor of the PSINet acquisition. Completion of the transaction is
subject to a number of conditions, including receipt of TNI shareholder approval
and regulatory approvals. The transaction is expected to close in the fourth
quarter of 1999.
PSINet was represented in the transaction by Donaldson, Lufkin & Jenrette
Securities Corporation and Wasserstein Perella & Co., Inc., investment bankers,
and Nixon Peabody LLP, outside counsel. TNI was represented on the transaction
by Morgan Stanley & Co. Incorporated, investment bankers, and Arent Fox Kinter
Plotkin & Kahn PLLC, outside counsel.
Transaction Network Services, Inc., headquartered in Reston, Virginia, provides
data communications services for transaction-oriented applications. The company
is listed on the New York Stock Exchange under the symbol TNI. Additional
company information is available on the TNI website at www.tnsi.com.
Headquartered in Herndon, VA, PSINet is a global facilities-based Internet
Protocol (IP) data communications carrier focused on the business marketplace.
As the first and largest independent commercial Internet service provider in the
world, PSINet offers a broad set
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of high-speed corporate LAN connectivity services supporting managed security
and guaranteed Internet, Intranet, electronic commerce, Web hosting services,
and services for other carriers and ISPs. PSINet operates an international
state-of-the-art frame relay and ATM-based, IP-optimized network consisting of
over 600 POPs around the world serving primary markets in Argentina, Austria,
Belgium, Brazil, Canada, France, Germany, Hong Kong, Italy, Japan, Luxembourg,
Mexico, the Netherlands, Panama, Republic of Korea, Spain, Switzerland, the
United States, and the United Kingdom. PSINet information can be obtained by
e-mail at [email protected], by accessing the Web site at http://www.psinet.com or by
calling toll-free in the U.S. 1-800-799-0676.
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Statements made in this press release that state the company or management's
intentions, beliefs, expectations, or predictions for the future are
forward-looking statements. It is important to note that the company's actual
results could differ materially from those projected in such forward- looking
statements. Information concerning factors that could cause actual results to
differ materially from those in the forward-looking statements is contained from
time to time in the company's filings with the Securities and Exchange
Commission (SEC). Copies of these filings may be obtained by contacting the
company or the SEC.
