PROSPECTUS SUPPLEMENT
(to Prospectus dated January 15, 1997)
Registration Nos. 333-16307 and 333-16307-01
Filed Pursuant to Rules 424(b)(3) and (c)
4,025,000 Trust Convertible Preferred Securities
VANSTAR FINANCING TRUST
6-3/4% Trust Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
guaranteed by, and convertible into Common Stock of,
VANSTAR CORPORATION
-------------------
This Prospectus Supplement supplements and amends the
Prospectus dated January 15, 1997 (the "Prospectus") relating to
the 6-3/4% Trust Convertible Preferred Securities (the "Preferred
Securities") which represent preferred undivided beneficial
ownership interests in the assets of Vanstar Financing Trust, a
statutory business trust formed under the laws of the State of
Delaware, and the shares of common stock, par value $.001 per share
(the "Company Common Stock"), of Vanstar Corporation, a Delaware
corporation, issuable upon conversion of the Preferred Securities.
All capitalized terms used but not otherwise defined in this
Prospectus Supplement shall have the meanings ascribed thereto in
the Prospectus.
Following their original issuance by the Trust, the Preferred
Securities have been resold by the Initial Purchasers and
subsequent purchasers thereof to qualified institutional buyers in
transactions exempt from registration under Rule 144A promulgated
under the Securities Act. The Preferred Securities have been and
will remain eligible for resale on the PORTAL Market. However,
Preferred Securities resold pursuant to this Prospectus will no
longer be eligible for trading on the PORTAL Market. The Company
and the Trust do not currently intend to list the Preferred
Securities resold pursuant to this Prospectus on any securities
exchange or to seek approval for quotation through any automated
quotation system. Accordingly, there can be no assurance as to the
development or liquidity of any market for the Preferred Securities
resold under this Prospectus. See "Risk Factors - Absence of Public
Market for the Preferred Securities on Resale" in the Prospectus.
Neither the Company nor the Trust will receive any of the
proceeds from the sale of the Preferred Securities by the Selling
Holders. Expenses of preparing and filing the Registration
Statement, the Prospectus, this Prospectus Supplement and all other
prospectus supplements are borne by the Company.
The Prospectus, together with this Prospectus Supplement,
constitutes the prospectus required to be delivered by Section 5(b)
of the Securities Act with respect to offers and sales of the
Preferred Securities and the Company Common Stock issuable upon
conversion of the Preferred Securities. All references in the
Prospectus to "this Prospectus" are hereby amended to read "this
Prospectus (as supplemented and amended)".
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING ON PAGE 13 OF THE PROSPECTUS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus Supplement is February 6, 1997.
The Prospectus is hereby amended to add the following
information to the end of the Section of the Prospectus entitled
"Selling Holders":
The following table sets forth the name of each Selling Holder
and the type and number of Offered Securities that may be offered
by each. The number of Offered Securities that may be actually sold
by each of the Selling Holders will be determined by each Selling
Holder, and may depend upon a number of factors, including, among
other things, the market price of the Company Common Stock. Because
each of the Selling Holders may offer all, some or none of the
Preferred Securities that each holds, and because the offering
contemplated by this Prospectus is currently not being
underwritten, no estimate can be given as to the number of
Preferred Securities that will be held by each of the Selling
Holders upon termination of this offering. See "Plan of
Distribution." The table below sets forth information as of
February 6, 1997 concerning beneficial ownership of the Preferred
Securities of each of the Selling Holders. All information
concerning beneficial ownership has been furnished by the Selling
Holders.
Preferred Securities
Owned Before Offering No. of Preferred
------------------------------ Securities Offered in
Name of Selling Holder Number Percent(1) the Offering
---------------------- ---------- --------- ----------------------
1. Robertson, Stephens & Co. LLP (2 77,250 1.9% 77,250
2. Alpine Associates 70,000 1.7 70,000
3. McMahan Securities Co. L.P. 10,000 * 10,000
4. Carrigaholt Capital (Bermuda) L.P 17,500 * 17,500
5. The Class 1C Company, Ltd. 17,500 * 17,500
6. Donaldson, Lufkin & Jenrette
Securities Corporation (3) 282,000 7.0 282,000
7. Lipper Convertibles, L.P. 20,000 * 20,000
8. Offshore Strategies 41,000 1.0 41,000
9. Laterman Strategies 90's LLC 29,050 * 29,050
10. Laterman and Co. 4,450 * 4,450
11. OCM Convertible Trust 78,100 1.9 78,100
12. OCM Convertible Limited Partnership 4,600 * 4,600
13. Delta Airlines Master Trust 53,900 1.3 53,900
14. State Employees Retirement Fund of the
State of Delaware 19,400 * 19,400
15. State of Connecticut Combined
Investment Funds 60,400 1.5 60,400
16. Vanguard Convertible Securities
Fund, Inc. 44,000 1.1 44,000
17. Hughes Aircraft Company Master
Retirement Trust 24,000 * 24,000
18. The TCW Group, Inc. 215,600 5.4 215,600
19. Triton Capital Holdings 10,000 * 10,000
20. JMG Convertible Investments LLP 31,500 * 31,500
21. Swiss Bank Corporation - London Branch 21,500 * 21,500
22. Forum Capital Markets LP 25,000 * 25,000
23. Ramius Fund, Ltd. 12,000 * 12,000
24. Palladin Partners, L.P. 2,000 * 2,000
25. Glen Eagles Fund Ltd. 12,000 * 12,000
26. Colonial Penn Life Insurance Co. 1,000 * 1,000
27. Colonial Penn Insurance Co. 1,000 * 1,000
28. Gershon Partners, L.P. 2,000 * 2,000
29. United National Life Insurance 1,665 * 1,665
30. Lincoln National Life Insurance 88,910 2.2 88,910
31. Lincoln National Convertible
Securities Fund 34,935 * 34,935
32. Weirton Trust 9,490 * 9,490
33. Hillside Capital Incorporated
Corporate Account 2,600 * 2,600
34. Thermo Electron Balance
Investment Fund 7,000 * 7,000
35. General Motors Employees Domestic
Group Trust 140,000 3.5 140,000
36. Defined Benefit Plan of ICI
American Holdings, Inc. 9,200 * 9,200
37. First Church of Christ,
Scientist-Endowment. 2,500 * 2,500
38. Christian Science Trustees for
Gifts and Endowments 2,500 * 2,500
39. Defined Benefit Plans of
Zeneca Holdings, Inc. 6,200 * 6,200
40. Delaware State Employees
Retirement Fund 30,000 * 30,000
41. Motors Insurance Corp. 10,000 * 10,000
42. General Motors Hourly Rate Employees
Pension Plan. General Motors
Retirement Program for Salaried
Employees 150,000 3.7 150,000
43. Employers Reinsurance Corp 30,000 * 30,000
44. American Investors Life Insurance
Company, Inc. 25,000 * 25,000
45. Reliant Trading 99,220 2.5 99,220
46. Sheperd Trading Limited 142,780 3.5 142,780
--------- ----- ---------
TOTAL 1,978,750 49.2% 1,978,750
========= ===== =========
- -----------------------------------
* Represents less than one percent.
(1) Percentage indicated is based upon 4,025,000 Preferred
Securities outstanding on February 6, 1997.
(2) Robertson, Stephens & Company LLC, an affiliate of Robertson,
Stephens & Co. LLP ("Robertson, Stephens"), has in the past
provided to the Company and/or its affiliates investment
banking and/or investment advisory services including (i)
acting as lead Initial Purchaser in the Original Offering and
the Over-Allotment Offering and (ii) acting as lead
underwriter in the Company's initial public offering occurring
March 11, 1996 (the "IPO"). In each case, Robertson, Stephens
has received only customary fees in connection with the
provision of such services.
(3) Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ")
has in the past provided to the Company and/or its affiliates
investment banking and/or investment advisory services
including (i) participation in the underwriting syndicate in
the Company's IPO, (ii) acting as one of the Initial
Purchasers in the Original Offering and the Over-Allotment
Offering and (iii) acting as the exclusive agent to, and
financial advisor of, the Company in connection with the
Securitization Facility. See "Recent Developments -
Securitization Facility" in the Prospectus. In each case, DLJ
has received only customary fees in connection with the
provision of such services. In addition, DLJ executed an
agreement with the Company on May 24, 1996 granting DLJ the
right to receive an aggregate of $20 million in payments
during May, June and July of 1997 out of the amounts collected
from receivables owed to the Company by Merisel FAB under the
distribution and services agreements dated as of January 31,
1994, as amended, between the Company and Merisel. DLJ paid
the Company $15.6 million for the right to receive these
payments. See "Recent Developments - Agreement with Donaldson,
Lufkin & Jenrette for Payment against Merisel Receivables" in
the Prospectus.
Except as set forth above, none of the other Selling Holders has,
or within the past three years has had, any position, office or
other material relationship with the Trust or the Company or any of
their predecessors or affiliates.
The Selling Holders identified above may have sold,
transferred or otherwise disposed of all or a portion of their
Preferred Securities since the date on which they provided the
information regarding their Preferred Securities in transactions
exempt from the registration requirements of the Securities Act.
None of the above listed Selling Holders has converted any of the
Preferred Securities into shares of Company Common Stock. See
"Description of Preferred Securities - Conversion Rights" in the
Prospectus. Additional Selling Holders or other information
concerning the above listed Selling Holders may be set forth from
time to time in additional prospectus supplements.