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): March 31, 1997
Zomax Optical Media, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
0-28426 41-1833089
(Commission File Number) (I.R.S. Employer Identification Number)
5353 Nathan Lane
Plymouth, Minnesota 55442
(Address of Principal Executive Offices) (Zip Code)
612-553-9300
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets.
As of March 31, 1997, Zomax Optical Media, Inc. (the "Company") acquired
all of the outstanding capital stock of Benchmark Media Services, Inc.
("Benchmark"). Prior to the acquisition, Benchmark was a software replicator
located in Plymouth, Minnesota with satellite offices in Indianapolis, Indiana
and the Orlando, Florida area. The Company intends to continue to operate
Benchmark as a wholly-owned subsidiary providing substantially the same products
and services Benchmark provided prior to the acquisition.
The purchase price for Benchmark's outstanding capital stock will be based
on revenues of Benchmark during 1997. Revenues are defined as the total invoice
amount for products and services based upon services performed and shipments
made prior to the end of 1997. The consideration payable by the Company to Jesse
Aweida, Benchmark's sole shareholder, on February 1, 1998 shall be as follows:
Revenue Generated Additional Consideration
less than $7.5 million $ 0
$7.5 - $8.5 million 250,000
$8.5 - $9.5 million 500,000
$9.5 - $11.0 million 750,000
$11.0 - $13.0 million 1,000,000
more than $13.0 million 1,250,000
The Company intends to fund this transaction through working capital. In
addition, the Company paid Mr. Aweida $1,000,000 plus accrued interest of
$9,369.86, as the repayment of certain debt owed by Benchmark to Mr. Aweida.
Further, in connection with the acquisition, Mr. Aweida agreed that he will not
compete with the Company, directly or indirectly, within a specified territory
for a period of five years.
The Company believes that this acquisition is in line with its strategy of
expanding operations through acquisitions and broadening its base of customers
and facilities. The success of this strategy will depend on management's ability
to integrate Benchmark's products and services, manufacturing operations and
personnel into the Company's current operation. These two companies have been
operating as separate independent entities, and there can be no assurance that
management will be able to effectively integrate and manage the combined entity
and implement the Company's operating or growth strategies. Further, there can
be no assurance that the Company will be able to retain the personnel currently
employed by each entity following the acquisition or that current sales
personnel will be able to effectively sell the other firm's products. Failure to
properly integrate these businesses on a timely basis or to implement the
Company's operating and growth strategy could have a material adverse impact on
the Company's profitability and future operating results.
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Certain of the statements contained herein are forward looking, based on
current expectations and are made pursuant to the safe harbor provisions of the
Private Securities Reform Act of 1995. As stated herein, there are certain
important factors that could cause results to differ materially from those
anticipated by those statements. Investors are cautioned that all
forward-looking statements involve risk and uncertainty.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of the business acquired:
It would be impracticable for the Company to provide the
financial statements of Benchmark for the periods specified in
Rule 3-05(b) of Regulation S-X at the time of filing of this
Form 8-K. The Company will file the required financial
statements as soon as practicable, but not later than sixty
days after the date on which this Form 8-K must be filed.
(b) Pro forma financial information:
It would be impracticable for the Company to provide the pro
forma financial information required by Article 11 of
Regulation S-X at the time of filing of this Form 8-K. The
Company will file the required pro forma financial information
as soon as practicable, but not later than sixty days after
the date on which this Form 8-K must be filed.
(c) Exhibits:
2.1 Stock Purchase Agreement dated March 31, 1997 by and among
Zomax Optical Media, Inc. and Jesse Aweida. Upon the request
of the Commission, the Company agrees to furnish a copy of the
exhibits and schedules to the Stock Purchase Agreement.
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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.
Dated: April 10, 1997
ZOMAX OPTICAL MEDIA, INC.
By /s/ James E. Flaherty
James E. Flaherty, Chief Financial Officer
and Secretary
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