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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) December 19, 1997
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BTG, INC.
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(Exact name of registrant as specified in its charter)
Virginia 000-25094 54-1194161
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
3877 Fairfax Ridge Road, Fairfax, Virginia 22030
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 383-8000
Not applicable
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(Former name or former address, if changed since last report)
Exhibit Index on Page: 4
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Total Number of Pages:
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Item 5. Other Events.
On December 19, 1997, BTG, Inc. ("BTG") announced the signing of a
letter of intent with Government Technology Services, Inc. ("GTSI") on December
18, 1997. Under the letter of intent, BTG would sell to GTSI substantially all
of the assets of the BTG division engaged in the business of reselling computer
hardware, software, peripherals and integrated systems. In exchange for such
assets, GTSI would pay to BTG $8,000,000 in cash and issue to BTG 3,000,000
shares of common stock of GTSI. Pursuant to a standstill agreement that BTG
would execute at closing, BTG would have certain restrictions on its ability to
transfer and vote its shares of GTSI stock. If the transaction is consummated,
BTG would own approximately 30.8% of the issued and outstanding shares of common
stock of GTSI. In addition, BTG would be entitled to one seat on GTSI's Board of
Directors and the two companies would mutually agree upon a second director
appointed by BTG. The transaction is expected to take several months to
complete. For additional information, please see the attached press release.
GTSI is a government reseller providing products and services to
federal, state and local government customers. GTSI reported gross revenues of
$492 million for its fiscal year ended December 31, 1996, and gross revenues of
$344.6 million for the nine month period ended September 30, 1997. Shares of
common stock of GTSI are traded on the NASDAQ under the symbol "GTSI".
There are a number of conditions to consummation of the
transaction, including, among others, (1) completion of satisfactory due
diligence by the parties, (2) the parties entering into a definitive acquisition
agreement, (3) obtaining any governmental or other required approvals and
consents (including under the Hart-Scott-Rodino Antitrust Improvements Act of
1976) and (4) approval of the transaction by the GTSI stockholders.
There can be no assurances that the above closing conditions will
be satisfied and that the transaction with GTSI will be consummated. The value
of the transaction to BTG will depend in part upon GTSI's future results of
operations and performance of its stock price, due to the fact that a
significant portion of the purchase price is in the form of GTSI stock. Although
the GTSI transaction will decrease BTG's operating expenses, the transaction is
also expected to result in decreased revenues in the first fiscal year after the
transaction is consummated, as well as potentially decreasing BTG's future rate
of revenue growth as a result of the sale of a revenue generating business. In
addition, the sale of assets to GTSI would likely result in a reduction of BTG's
borrowing base for purposes of its revolving credit facility and, therefore,
limit BTG's available financing for working capital and acquisition purposes.
The liquidity of the shares of GTSI stock received by BTG in the transaction
will be limited due to restrictions placed under the standstill agreement.
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Except for historical information, all of the statements, including
the benefits of the transaction for both companies, expectations and assumptions
contained in the foregoing are "forward-looking statements" (within the meaning
of the Private Securities Litigation Reform Act of 1995) that involve a number
of risks and uncertainties. It is possible that the assumptions made by
management for purposes of such statements may not materialize. Actual results
may differ materially from those projected or implied in any forward-looking
statements.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99 Press Release dated December 19, 1997
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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.
BTG, INC.
Date: December 19, 1997 By:/s/ Edward H. Bersoff
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Edward H. Bersoff
Chairman of the Board,
Chief Executive Officer
and President
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EXHIBIT INDEX
Exhibit No. Description
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99 Press Release dated December 19, 1997
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EXHIBIT 99
BTG SELLS PRODUCT SALES DIVISION TO GTSI
CHANTILLY, VA (December 19, 1997) -- BTG, Inc. (BTG) (Nasdaq: BTGI)
and Government Technology Services, Inc. (GTSI) (Nasdaq: GTSI) today
announced that they signed a letter of intent whereby BTG would sell
substantially all of the assets of the BTG division responsible for reselling
computer hardware, software and integrated systems to the Federal Government to
GTSI in exchange for three million shares of GTSI stock and eight million
dollars in cash. BTG would end up owning 30.8% of the stock of GTSI. In
addition, BTG would be entitled to one seat on GTSI's Board of Directors and
the two companies would mutually agree to a second director. The transaction is
subject to approval of the shareholders of GTSI.
BTG's and GTSI's management believe this transaction will be
positive for all concerned parties because the business partnership allows BTG
to focus on and grow its services and integration businesses, obtaining the
necessary COTS (commercial off-the-shelf) products from GTSI, and permits GTSI
to strengthen and consolidate its dominant federal reseller channel position so
that GTSI may better compete in the federal information technology segment.
BTG President and CEO, Dr. Edward H. Bersoff said, "This
transaction will allow BTG to continue to focus on and grow our core business
which is to provide services and support to Government and commercial customers.
Shareholders, customers, and suppliers will benefit from the size and focus of
the two companies. Plus, we and our customers would still share in the
logistical efficiencies that GTSI brings to the table."
Commenting on the acquisition, Dendy Young, President and CEO of
GTSI said, "GTSI will be able to leverage its existing distribution
infrastructure to provide aggressively-priced product on a timely basis to BTG's
and GTSI's customers. This transaction will cement GTSI's position as the
dominant federal channel information technology reseller and enable the company
to better compete in the federal information technology segment." Dendy Young
also noted, "I am very pleased that Dr. Bersoff will be joining our Board of
Directors and that the two companies will be working closely together in the
future."
The transaction is expected to take several months to
complete.
GTSI reported a net income of $1.9 million, or $0.27 per share, in
the third quarter of calendar 1997. For the same period, BTG reported a loss
of $2.3 million, or $0.27 per share.
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Except for historical information, all of the statements, including
the benefits of the transaction for both companies, expectations and assumptions
contained in the foregoing are "forward-looking statements" (within the meaning
of the Private Securities Litigation Reform Act of 1995) that involve a number
of risks and uncertainties. It is possible that the assumptions made by
management for purposes of such statements may not materialize. Actual results
may differ materially from those projected or implied in any forward-looking
statements. In addition to the above factors, other important factors that could
cause actual results to differ materially are those listed in the most
recent reports on Form 10-K for both companies and included from time to time
in other documents filed by the companies with the Securities and Exchange
Commission.
BTG provides information technology services and products to
government and commercial clients. The company specializes in systems
engineering, integration and network systems, internet/intranet/extranet access
and services. The company is headquartered in Fairfax, Virginia. Additional
information on BTG is available on the Internet at www.btg.com by e-mail or
[email protected], or by calling 703-383-8000.
GTSI is the largest dedicated government reseller providing
broad-based information technology solutions. The Company offers access to over
100,000 information technology products from more than 2,000 manufacturers.
Headquartered in the Washington metropolitan area, GTSI employs approximately
400 people and provides products and services to Federal, state and local
government customers worldwide. Founded in 1983, GTSI has been ranked by
Computer Reseller News as one of the top 10 resellers nationwide every year
since 1993, when CRN began ranking resellers. Further information may be
obtained on the Internet at www.gtsi.com.
GTSI is a registered service mark of Government Technology
Services, Inc. All other trademarks and service marks are proprietary to their
respective owners.
CONTACTS:
Fern Krauss
ESTN Communications
(301) 424-9140
[email protected]
Theda Parrish
BTG
(703) 383-8145
[email protected]
[email protected]
