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
September 21, 2001
(Date of Report)
(Date of earliest event reported)
JOHN WILEY & SONS, INC.
(Exact name of registrant as specified in its charter)
New York
(State or jurisdiction of incorporation)
0-11507 13-5593032
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Commission File Number IRS Employer Identification Number
605 Third Avenue, New York, NY 10158-0012
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Address of principal executive offices Zip Code
Registrant's telephone number, including area code: (212) 850-6000
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This is the first page of a four page document.
Item 2. Acquisition or Disposition of Assets
On September 21, 2001, the Company completed its cash tender offer to
purchase all outstanding shares of Hungry Minds, Inc., (Hungry Minds)
at a purchase price of $6.09 net per share. Approximately 98% of all
the outstanding shares of common stock were validly tendered,
including shares owned by International Data Group, Inc., which
represented 76% of the outstanding shares. Effective September 25,
2001, the Company completed a "short form" second-step cash merger at
$6.09 net per share pursuant to which the Company acquired the
remaining outstanding shares, subject to dissenters rights. The total
purchase price amounted to approximately $182.7 million excluding fees
and expenses, consisting of approximately $90.2 million for the common
stock of Hungry Minds and $92.5 million for the payoff of the
outstanding funded debt of Hungry Minds.
Hungry Minds is a leading global knowledge company with a diverse
portfolio of technology, business, consumer, and how-to brands,
computer-based learning tools, Web-based products and Internet
e-services. Publications include best-selling brands including the For
Dummies series, the Unofficial Guide, the technological Bible and
Visual series, Frommer's travel guides, CliffsNotes, Webster's New
World Dictionary, Betty Crocker, Weight Watchers, and other
market-leading brands. Hungry Minds has 2,500 active titles in 39
languages, including 600 frontlist titles and revisions per year.
Revenues for the fiscal year ended September 30, 2001 were
approximately $179 million.
The transaction was initially financed by funds obtained through a new
$300 million bank credit facility provided by UBS AG, Stamford Branch
(UBS), consisting of a $200 million five-year term loan facility and a
$100 million five-year revolving credit facility. The Company has the
option of borrowing at the following floating interest rates: (i) at a
rate based on the London Interbank Offered Rate (LIBOR) plus an
applicable margin ranging from .625% to 1.375% depending on the
coverage ratio of debt to EBITDA; or (ii) at the higher of (a) the
Federal Funds Rate plus .5% or (b) UBS's prime rate, plus an
applicable margin ranging from 0% to .375% depending on the coverage
ratio of debt to EBITDA. In addition, the Company pays a commitment
fee ranging from .125% to .225% on the unused portion of the facility
depending on the coverage ratio of debt to EBITDA. In the event of a
change of control, as defined, the bank has the option to terminate
the agreement and require repayment of any amounts outstanding. The
credit facility contains certain restrictive covenants similar to the
Company's existing credit agreements related to minimum net worth,
funded debt levels, an interest coverage ratio, and restricted
payments, including a cumulative limitation for dividends paid and
share repurchases.
The Company estimates that the acquisition will be neutral on a cash
earnings per share basis in the current fiscal year and accretive
thereafter.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits
(a) Financial Statements of Businesses Acquired
As of the date of filing this Current Report on Form 8-K, it
is impracticable for the Company to provide the financial
statements required by this Item 7(a). In accordance with
Item 7(a)(4) of Form 8-K, such financial statements shall be
filed by amendment to this Form 8-K no later than 60 days
after October 6, 2001.
(b) Pro Forma Financial Information
As of the date of filing this Current Report on Form 8-K, it is
impracticable for the Company to provide the pro forma financial
information required by this item 7(b). In accordance with Item 7(b)
of Form 8-K, such financial statements shall be filed by amendment to
this Form 8-K no later than 60 days after October 6, 2001. (c)
Exhibits
2.1 Agreement and Plan of Merger dated as of August 12, 2001
among the Company, HMI Acquisition Corp. and Hungry Minds,
Inc. (incorporated by reference to the Company's Report on
Form 8-K dated as of August 12, 2001).
10.1 $300,000,000 Credit Agreement dated as of September 21,
2001 among the Company and the Lenders From Time to Time
Parties Hereto, UBS AG Stamford Branch, as Administrative
Agent and UBS Warburg LLC, as Arranger (incorporated by
reference to the Company's Report on Schedule TO/A Amendment
No. 5 dated September 21, 2001).
"Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995
This report contains certain forward-looking statements concerning the Company's
operations, performance, and financial condition. Reliance should not be placed
on forward-looking statements, as actual results may differ materially from
those in any forward-looking statements. Any such forward-looking statements are
based upon a number of assumptions and estimates that are inherently subject to
uncertainties and contingencies, many of which are beyond the control of the
Company, and are subject to change based on many important factors. Such factors
include, but are not limited to (i) the level of investment in new technologies
and products; (ii) subscriber renewal rates for the Company's journals; (iii)
the financial stability and liquidity of journal subscription agents; (iv) the
consolidation of book wholesalers and retail accounts; (v) the market position
and financial stability of key online retailers; (vi) the seasonal nature of the
Company's educational business and the impact of the used book market; (vii)
worldwide economic and political conditions; and (viii) other factors detailed
from time to time in the Company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update or revise any such
forward-looking statements to reflect subsequent events or circumstances.
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.
John Wiley & Sons, Inc.
/S/ William J. Pesce
William J. Pesce
President and
Chief Executive Officer
Date: October 3, 2001