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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) July 27, 1999
Insight Enterprises, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-2 5 0 9 2 86-0766246
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
6820 South Harl Avenue, Tempe, Arizona
(Address of principal executive offices)
85283
(Zip Code)
Registrant's telephone number, including area code (602) 902-1001
Not Applicable
(Former name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On May 10, 1999, Insight Enterprises, Inc., a Delaware corporation
("Insight"), and Action Computer Supplies Holdings PLC, a company registered in
England ("Action"), agreed to the terms of the proposed acquisition of all the
issued share capital of Action by Insight (the "Merger") by means of a scheme of
arrangement under Section 425 of the Companies Act of 1985, a United Kingdom
statutory procedure. Pursuant to the terms of the Original Merger Agreement,
dated May 10, 1999, by and between Insight and Action (the "Original Merger
Agreement"), holders of Action common stock were to receive 0.16 shares of
Insight common stock for each share of Action common stock. On July 27, 1999,
the Original Merger Agreement was revised by Insight and Action (the
"Supplemental Merger Agreement" and, together with the Original Merger
Agreement, the "Merger Agreement"). Under the Supplemental Merger Agreement,
holders of Action common stock will now receive 0.12 shares of Insight common
stock for each share of Action common stock. The reduction was agreed to between
Insight and Action as a result of weaker operating results recently experienced
by Action.
The Merger is expected to close in October of 1999 contingent upon the
fulfillment of certain conditions regarding the Merger including, but not
limited to, approval of the Merger by both the shareholders of Action and the
High Court of Justice in England and Wales and approval of the issuance of
common stock pursuant to the Merger Agreement by the stockholders of Insight.
The Merger will be accounted for as a pooling of interests.
Item 7. Financial Statements and Exhibits.
<TABLE>
<CAPTION>
Exhibit Number
- --------------
<S> <C>
2.1 Supplemental Merger Agreement, dated July 27, 1999, by and
between Insight Enterprises, Inc. and Action Computer Supplies
Holdings PLC
99.1 July 27, 1999 United States press release
</TABLE>
2
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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.
INSIGHT ENTERPRISES, INC.
(Registrant)
Date: August 12, 1999 By: /s/ ERIC J. CROWN
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Eric J. Crown
Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
2.1 Supplemental Merger Agreement, dated July 27, 1999, by and
between Insight Enterprises, Inc. and Action Computer Supplies
Holdings PLC
99.1 July 27, 1999 United States press release
</TABLE>
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Exhibit 2.1
Dated 27 July 1999
INSIGHT ENTERPRISES, INC.
and
ACTION COMPUTER SUPPLIES HOLDINGS PLC
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SUPPLEMENTAL MERGER AGREEMENT
----------------------------------------
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SUPPLEMENTAL MERGER AGREEMENT
THIS AGREEMENT is made on 27 July 1999.
BETWEEN:
(1) INSIGHT ENTERPRISES, INC., a US corporation organised under the
laws of Delaware, having its registered office at 6820 South Harl Avenue, Tempe,
Arizona 85283, USA (Offeror);
(2) ACTION COMPUTER SUPPLIES HOLDINGS PLC, a company registered in
England with number 02479302 and whose registered office is at Alperton House,
Bridgewater Road, Wembley, Middlesex HA0 1 EH (Offeree).
WHEREAS:
(i) This agreement is supplemental to and should be read and
construed in conjunction with the Merger Agreement entered
into between the parties on 10 May 1999 (Merger Agreement).
(ii) The parties intend to effect the Merger on the basis of and
subject as set out in the Merger Agreement subject as revised
herein.
IT IS AGREED AS FOLLOWS:
1 Interpretation
1.1 Definitions
Words and expressions defined in the Merger Agreement shall bear the
same meaning herein unless otherwise provided herein. In this Agreement:
Announcement Date means 27 July 1999;
Merger means the Acquisition;
Revision Announcement means the joint press announcement containing
details of the revised Merger terms in the Agreed Form;
Revised Conditions means the Conditions revised as stated in Appendix I
to the Revision Announcement.
2 The Merger
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2.1 References in the Merger Agreement to the Merger including
without limitation the Exchange Proportion shall be read and construed as if the
same were references to the terms thereof as set out or referred to in the
Revision Announcement or herein, references in the Merger Agreement to the
"Conditions" shall be read and construed as references to the Revised Conditions
and references in the Merger Agreement to "this Agreement" shall be read and
construed as references to the Merger Agreement as supplemented by this
Agreement.
2.2 Offeree confirms that the persons shown in the Schedule hereto
as having executed undertaking letters substantially in the Agreed Form
identified in Appendix I to the Merger Agreement have confirmed that such
commitments apply as if references therein to the Scheme were to the Scheme
revised as agreed between Offeror and Offeree as herein provided and has agreed
to procure the delivery by each such person to Offeror as soon as reasonably
practicable hereafter and in any event prior to the posting of the Circular of
written confirmations to that effect in terms reasonably acceptable to Offeror.
3 Deferred Share
3.1 Conditional on the required approval of shareholders of
Offeree, Offeree agrees with and undertakes to Offeror that it will issue one
deferred redeemable non-voting share of pound sterling 1 fully paid to Offeror
prior to the Scheme becoming effective in order to cause Offeror to become a
member of Offeree prior to the Scheme becoming effective and Offeror agrees with
and undertakes to Offeree that Offeror will subscribe for one such share at par
immediately upon the creation thereof. The obligations in Clause 3 of the Merger
Agreement shall cease to apply.
4 Share Exchange
4.1 In Clause 4.2.1. of the Merger Agreement the figure "0.16"
shall be replaced by the figure "0.12".
5 Announcement
5.1 Offeree and Offeror agree that the Revision Announcement shall
be released to the London Stock Exchange Limited at or about 23.59 hours (London
time) on the Announcement Date.
6 Termination: Termination Fee
6.1 Offeror hereby confirms that references to the Conditions in
Clause 14.1.5 of the Merger Agreement shall be construed as references to the
Revised Conditions;
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6.2 Offeree hereby confirms that the agreement to revise the terms
of the Merger as herein provided constitutes a variation of the terms of the
Merger and does not constitute a decision by the Board of Offeror not to proceed
with the Merger.
In witness whereof this Agreement has been duly executed on the date first
mentioned on page 1.
SIGNED by /s/ Stanley Laybourne )
---------------------
on behalf of )
INSIGHT ENTERPRISES, INC. )
SIGNED by /s/ George Laplante )
---------------------
on behalf of )
ACTION COMPUTER SUPPLIES )
HOLDINGS PLC )
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SCHEDULE
Henry Lewis
George Laplante
Duncan Wilkes
Ian Wakelin
Allan Daniel
Peter Dicks
Philip Holbeche
Stephen Ives
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EXHIBIT 99.1
[INSIGHT LOGO]
INSIGHT ENTERPRISES, INC. AND ACTION COMPUTER SUPPLIES
ANNOUNCE REVISED MERGER TERMS
Tempe, Arizona - July 27, 1999 - Leading global computer direct marketer INSIGHT
ENTERPRISES, INC. (NASDAQ: NSIT) and Action Computer Supplies Holdings plc
(LSE:ACS), the leading United Kingdom-based IT direct marketer, today announced
that their Boards have agreed to a revision of the terms of the proposed merger
previously announced on May 10, 1999. Under the terms of the revised agreement,
holders of Action stock will receive 0.12 of an Insight share of common stock
for each Action share. Under the previously announced terms, Action shareholders
would have received 0.16 of an Insight share for each Action share. The
reduction has been agreed between Insight and Action as a result of weaker
operating results recently experienced by Action.
With the revision, Insight expects to issue approximately 4.23 million new
shares, representing 14.2% ownership of the Company by Action shareholders,
immediately following the completion of the merger. Previously the Company had
announced that it expected to issue approximately 5.64 million new shares,
representing 18.1% ownership of the Company. It was previously announced that
the transaction was expected to be accretive to earnings per share for the year
ending December 31, 1999. As a result of Action's weaker operating performance,
Insight believes the merger will be slightly dilutive to earnings per share for
the year ending December 31, 1999, but remains confident that the merger would
enhance earnings per share for the year ending December 31, 2000 and thereafter.
Insight expects to account for the merger as a pooling of interests.
According to Insight President Tim Crown, "Strategically, Action is key to our
further expansion into Europe. Their recent weak sales performance reflects
temporary market conditions relating to a slowdown in spending by businesses due
to Y2K, along with changes they have recently made to their infrastructure to
position them for future growth. Historically, Action has had strong sales
growth and profitability. We are confident about their prospects for Year 2000
and beyond, and will be working in the interim to transition Action to the
Insight model and reenergize their sales momentum." The Company expects that the
merger transaction will be completed in October of 1999.
In Action's April 14, 1999 release of their interim results, Action's Board
commented that PC sales and large customer spending continued to be weak and
that they were cautious about the effect on
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prospects for the full financial year. Market and operating conditions have
deteriorated materially since the merger was announced, with large customer
spending further impacted by a slowdown in ordering ahead of Year 2000. Action
introduced new IT systems in March and opened a new call center in April. This
enabled Action to reorganize its sales force in May to address the change in
market conditions, although there was some temporary disruption as a result. In
June, Action successfully initiated an outbound telesales operation, which is
now being expanded. Sales in the second half of the year are expected to be at a
similar level to the first half.
ABOUT INSIGHT: Insight is a global direct marketer of brand name computers,
hardware and software with locations in the United States, United Kingdom,
Canada and Germany. The Company markets primarily to small- and medium-sized
businesses comprised of 50 to 1,000 employees, through a combination of a strong
outbound telephone-based sales force, electronic commerce at www.insight.com and
electronic marketing. The Company offers an extensive assortment of more than
100,000 SKUs of computer hardware and software. Insight's net sales for the 12
months ended June 30, 1999 were $1.262 billion. For product sales or Company
information visit www.insight.com.
ABOUT ACTION: Action is the leading U.K.-based IT direct marketer, offering a
wide range of computer products and services to small, medium and large
businesses with operations in the U.K. and Spain. Action markets its products
and services through a combination of direct mail catalogs, electronic commerce,
outbound telemarketing and field sales forces. The company offers over 13,500
brand name computer products similar in range to that offered by Insight.
Through its dedicated service organization, Action offers a complete range of
product-based services such as pre-configuration, on-site maintenance,
consultancy and desktop installation. Action has been aggressively growing its
electronic commerce business with unassisted electronic ordering reaching 8.6%
of sales for the 26 weeks ended February 26, 1999. Action's net sales for the 12
months ended February 28, 1999 were (pound)282 million ($460 million).
This release contains forward-looking statements including, with respect to the
consummation of the merger, the integration of services and opportunities
related to the merger. As such statements apply to future events, they are
subject to risks and uncertainties which may cause the actual results to differ
materially, including, without limitation, the risk that the merger will not be
consummated, integration risks related to the merger and the risk that the
anticipated benefits of the merger will not be realized. Other risks and
uncertainties include fluctuations in operating results, intense competition,
management of rapid growth, need for additional financing, past and future
acquisitions, international operations, risks of business interruption, year
2000 issues, reliance on outsourcing arrangements, changing methods of
distribution, reliance on suppliers, changes in vendor rebate programs, rapid
change in product standards, inventory obsolescence, sales and income tax
uncertainty, increasing marketing, postage and shipping costs, and dependence on
key personnel. These factors are discussed in greater detail under "Factors That
May Affect Future Results And Financial Condition" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998, as filed with the
Securities and Exchange Commission.
CONTACTS:
STANLEY LAYBOURNE
Chief financial officer,
secretary and treasurer
TEL. 480/350-1142
EMAIL [email protected]
