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
Date of Report (Date of earliest event reported): January 26, 1999
CFI ProServices, Inc.
(Exact name of registrant as specified in its charter)
Oregon 0-21980 93-0704365
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
400 S.W. Sixth Avenue, Portland, Oregon 97204
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 274-7280
This Form 8-K consists of 46 pages. Exhibits are indexed on page 4.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Effective as of January 1, 1999, CFI ProServices, Inc. (the
"Company"), acquired substantially all of the assets of Modern Computer Systems,
Inc., a Minnesota corporation ("MCS"), and certain related corporations
(collectively, the "Assets"). MCS, whose principal executive offices are located
in Burnsville, Minnesota, provides back office ("host") data processing and
related services to financial institutions. In accordance with the terms of an
Asset Purchase and Sale Agreement (the "Agreement") executed on January 26, 1999
by the Company, MCS, Ronald L. Ingersoll (the sole shareholder of MCS,
"Ingersoll"), and BankServ, Inc., Inasyst, Inc. and Dealer Computer Systems,
Inc. (all Minnesota corporations owned by Mr. Ingersoll either solely or in
joint tenancy with his spouse, and collectively with Ingersoll and MCS, the
"Sellers"), the Company agreed to pay a combination of cash and shares of the
Company's common stock (the "CFI Stock") in the aggregate amount of $6,550,000
(the "Purchase Price") to MCS for the Assets, and $100,000 to Ingersoll as
consideration for a non-compete agreement.
The Agreement provides for the payment of the Purchase Price as
follows:
(a) Cash in the aggregate net amount of approximately $5,400,000
($6,000,000 less cash received of approximately $600,000).
(b) 50,000 shares of CFI Stock, having an aggregate market value on
that date equal to approximately $650,000. The CFI Stock is not registered
and, as such, is a "restricted security" as that term is defined in Rule
144 of the Securities Act of 1933, as amended.
The Purchase Price of the Assets was determined by negotiation
between the Company and Ingersoll. Prior to entering into the Agreement, there
was no relationship between the Company and any of the Sellers.
MCS does not own a significant amount of assets categorized as
property and equipment and MCS leases the facilities out of which it currently
operates. The Company intends that it will continue to utilize these facilities
and equipment (primarily computer equipment) in the same manner MCS utilized
them prior to the Company's acquisition of the Assets. The other corporate
Sellers do not own any assets categorized as property and equipment and do not
lease any operating facilities.
The Company's acquisition of the Assets was financed through working
capital. The Company does not expect to borrow any funds in connection with its
payment obligations pursuant to the acquisition.
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In connection with this acquisition, the Company believes it will
likely take a pre-tax charge in the first quarter of 1999 representing the
value, to be determined by independent appraisal, of acquired in-process
research and development.
The Agreement is being filed as Exhibit 2.1, and is incorporated
into this Current Report on Form 8-K by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired. The Company's
acquisition of the Assets does not qualify as the acquisition of a significant
business pursuant to Item 2, Instruction 4 of Form 8-K and Rule 11-01(b) of
Regulation S-X. As such, financial statements are not required pursuant to Rule
3-05(b)(2)(i).
(b) Pro forma financial information. The Company's acquisition of
the Assets does not qualify as the acquisition of a significant business
pursuant to Item 2, Instruction 4 of Form 8-K. As such, pro forma financial
information is not required pursuant to Rule 11-01 of Regulation S-X.
(c) Exhibits.
Exhibit No. Description
2.1 Asset Purchase and Sale Agreement,
dated effective January 1, 1999,
among CFI ProServices, Inc., Modern
Computer Systems, Inc., BankServ,
Inc., Inasyst, Inc., Dealer Computer
Systems, Inc., and Ronald L.
Ingersoll
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 hereunto duly authorized.
CFI PROSERVICES, INC.
Date: February 10, 1999 By: /s/ Jeffrey P. Strickler
--------------------------------
Jeffrey P. Strickler
Vice President and General Counsel
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INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit Number Description Page
- -------------- ---------------------------------------- ------------
2.1 Asset Purchase and Sale Agreement, dated -5-
effective January 1, 1999, among
CFI ProServices, Inc., Modern Computer
Systems, Inc., BankServ, Inc., Inasyst, Inc.,
Dealer Computer Systems, Inc., and Ronald L.
Ingersoll
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