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) June 30, 1998
GENTLE DENTAL SERVICE CORPORATION
(Exact name of registrant as specified in its charter)
Washington 000-23673 91-1577891
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File No.) Identification No.)
222 North Sepulveda Boulevard, Suite 740, El Segundo, California 90245
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(Address of principal executive offices) (Zip Code)
(310) 765-2400
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(Registrant's telephone number, including area code)
No Change
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(Former name, former address and former fiscal year,
if changed since last report)
Item 2. Acquisition or Disposition of Assets
On June 30, 1998, Gentle Dental Service Corporation (the "Company")
completed the acquisition of certain assets of Pacific Dental Services, Inc.
("PDS"), consisting of all of the assets of PDS associated with 8 dental
practices managed by PDS or Orange Dental Services in Orange and Riverside
counties of California. The Company also acquired substantially all of the
assets of Orange Dental Services, a partnership of which PDS is the controlling
partner, which was the manager of one of the acquired practices. Lastly, the
acquisition included the purchase from Bryan Watanabe, D.D.S., Inc., the
professional corporation conducting one of the acquired practices ("Watanabe"),
of its rights under the previously existing management agreement between
Watanabe and PDS. In addition, the Company has entered into a definitive
agreement to acquire substantially all of the assets of TG3 Dental Services
("TG3"), which manages one additional dental practice in Riverside, California;
this acquisition is scheduled to close on October 31, 1998.
The aggregate purchase price paid at closing on June 30, 1998 consisted of
$6,510,655 in cash, assumption of $866,330 in debt, and 182,425 shares of
Company Common Stock valued at $1,616,765. The purchase price to be paid at
closing for the assets of TG3 will consist of $840,000 in cash and 40,620 shares
of Company Common Stock valued at $360,000. In addition, the Company has agreed
to make cash and stock earnout payments as set forth in the agreements based on
the EBITDA of the acquired businesses for the first three years following the
closing. The cash paid at closing was obtained from the Company's existing cash
balances.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Audited Consolidated Balance Sheets of PDS as of December 31, 1996 and
1997, and related audited Consolidated Statements of Operations,
Stockholders' Equity and Cash Flows of PDS for the years ended December
31, 1996 and 1997.
Unaudited Consolidated Balance Sheets of PDS as of March 31, 1998, and
related unaudited Consolidated Statements of Operations, Stockholders'
Equity and Cash Flows of PDS for the three-month periods ended March
31, 1997 and 1998.
Audited Consolidated Balance Sheets of TG3 as of December 31, 1997, and
related audited Consolidated Statements of Operations, Stockholders'
Equity and Cash Flows of TG3 for the two-month period ended December
31, 1997.
Unaudited Consolidated Balance Sheets of TG3 as of March 31, 1998, and
related unaudited Consolidated Statements of Operations, Stockholders'
Equity and Cash Flows of TG3 for the three-month period ended March 31,
1998.
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The foregoing financial statements are not included in this report and
will be filed by amendment to this report on or before September 14,
1998.
(b) Pro forma financial information. Pro forma Balance Sheet as of March
31, 1998 and pro forma Statements of Operations for the year ended
December 31, 1997 and the three-month period ended March 31, 1998.
The foregoing pro forma financial statements are not included in this
report and will be filed by amendment to this report on or before
September 14, 1998.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Pacific Dental
Services, Inc.
2.2 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Orange Dental
Services.
2.3 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and TG3 Dental Services.
2.4 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Bryan Watanabe,
D.D.S., Inc.
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.
Dated: July 15, 1998
GENTLE DENTAL SERVICE CORPORATION
By NORMAN R. HUFFAKER
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Norman R. Huffaker,
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
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2.1 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Pacific Dental
Services, Inc.
The following exhibits and schedules to the Asset Purchase
Agreement have been omitted and will be provided to the Securities
and Exchange Commission upon request:
Exhibit C Assumption Agreement
Exhibit D Assignment and Bill of Sale
Exhibit E Management Agreement
Exhibit F Shares Acquisition Agreement
Exhibit G Dentist Employment Agreement
Exhibit H Agreement Regarding New Offices
Exhibit I Employment Agreement
Schedule 1.02-2 Excluded Assets
Schedule 1.10 Purchase Price Allocation
Schedule 3.04 Litigation
Schedule 3.06-2 Employee Benefits
Schedule 3.06-3 Employment Manuals and Policies
Schedule 3.06-4 Compensation
Schedule 3.07 Financial Statements
Schedule 3.08 Receivables
Schedule 3.09 Prepaid Expenses and Other
Schedule 3.10 Tangible Personal Property
Schedule 3.11 Payables
Schedule 3.12 Indebtedness
Schedule 3.13 Other Liabilities
Schedule 3.15 Leases
Schedule 3.16 Contracts
Schedule 3.19 Insurance
Schedule 3.22 Permits
Schedule 3.25 Consents and Approvals
2.2 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Orange Dental
Services.
The following exhibits and schedules to the Asset Purchase
Agreement have been omitted and will be provided to the Securities
and Exchange Commission upon request:
Exhibit A Assumption Agreement
Exhibit B Assignment and Bill of Sale
Exhibit C Management Agreement
Exhibit D Shares Acquisition Agreement
Exhibit E Dentist Employment Agreement
Schedule 1.02-2 Excluded Assets
Schedule 1.09 Purchase Price Allocation
Schedule 3.04 Litigation
Schedule 3.06-2 Employee Benefits
Schedule 3.06-3 Employment Manuals and Policies
Schedule 3.06-4 Compensation
Schedule 3.12 Indebtedness
Schedule 3.13 Other Liabilities
Schedule 3.15 Leases
Schedule 3.16 Contracts
Schedule 3.19 Insurance
Schedule 3.22 Permits
Schedule 3.25 Consents and Approvals
2.3 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and TG3 Dental Services.
The following exhibits and schedules to the Asset Purchase
Agreement have been omitted and will be provided to the Securities
and Exchange Commission upon request:
Exhibit A Assumption Agreement
Exhibit B Assignment and Bill of Sale
Exhibit C Management Agreement
Exhibit D Shares Acquisition Agreement
Exhibit E Dentist Employment Agreement
Schedule 1.02-2 Excluded Assets
Schedule 1.10 Purchase Price Allocation
Schedule 3.04 Litigation
Schedule 3.06-2 Employee Benefits
Schedule 3.06-3 Employment Manuals and Policies
Schedule 3.06-4 Compensation
Schedule 3.07 Financial Statements
Schedule 3.08 Receivables
Schedule 3.09 Prepaid Expenses and Other
Schedule 3.10 Tangible Personal Property
Schedule 3.11 Payables
Schedule 3.12 Indebtedness
Schedule 3.13 Other Liabilities
Schedule 3.15 Leases
Schedule 3.16 Contracts
Schedule 3.19 Insurance
Schedule 3.22 Permits
Schedule 3.25 Consents and Approvals
2.4 Asset Purchase Agreement, dated as of June 30, 1998, between the
Company, Gentle Dental Management, Inc. and Bryan Watanabe,
D.D.S., Inc.
The following exhibits to the Asset Purchase Agreement have
been omitted and will be provided to the Securities and
Exchange Commission upon request:
Exhibit A Assignment and Bill of Sale
Exhibit B Management Agreement
Exhibit C Shares Acquisition Agreement
Exhibit D Dentist Employment Agreement