SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 August 12, 1997
Control Data Systems, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State of Other Jurisdiction of Incorporation)
0-20252 41-171807
(Commission File Number) (I.R.S. Employer Identification No.)
4201 Lexington Avenue North
Arden Hills, Minnesota 55126
(Address of Principal Executive Offices) (Zip Code)
(612) 482-2100
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 1. Changes in Control of the Registrant
On or about August 12, 1997, pursuant to a previously announced tender
offer, CDSI Acquisition Corporation (the "Purchaser"), a wholly-owned subsidiary
of CDSI Holding Corporation (the "Parent"), a corporation formed at the
direction of Welsh, Carson, Anderson & Stowe VII, L. P. ("WCAS"), acquired
11,255,203 shares of the outstanding Common Stock of the Registrant at a
purchase price of $20.25 per share net to the seller without interest. As a
result of such acquisition, the Purchaser owns approximately 89.2% of the
outstanding Common Stock of the Registrant. Pursuant to the Agreement and Plan
of Merger dated as of July 8, 1997, by and among the Purchaser, the Parent and
the Registrant (the "Merger Agreement"), the merger provided for therein (the
"Merger") of the Purchaser with and into the Registrant will be submitted to the
Registrant's stockholders for approval as soon as practicable. The Purchaser has
sufficient voting power to approve the Merger Agreement and has agreed to vote
in favor of the Merger Agreement and the Merger. Accordingly, approval of the
Merger is assured.
The acquisition of the Registrant's Common Stock was financed by (i) the
sale, pursuant to a Securities Purchase Agreement dated as of August 11, 1997,
(the "Securities Purchase Agreement"), of equity and debt securities of the
Parent to WCAS and certain investment funds and related persons affiliated with
WCAS in the aggregate amount of $120,000,000, and (ii) a tender offer credit
facility of approximately $128,000,000 (secured in part by the shares purchased
in the tender offer) and a bridge loan facility of up to $85,200,000 (secured in
part by the Securities Purchase Agreement) provided to the Purchaser by
NationsBank of Texas, N.A. and The Bank of Nova Scotia. Advances under the
tender offer credit facility are subject to interest at an annual rate equal to
the greater of the prime rate of NationsBank, N.A. in Charlotte, North Carolina,
as publicly announced from time to time, or 1/2 of one percent per annum above
the rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers ("the Prime Rate"), in each case, plus 1.00%. Advances
under the bridge loan facility, which are guaranteed by WCAS, are subject to
interest at an annual rate equal to the Prime Rate or, at the election of the
Purchaser, an annual rate based on the London interbank offered rate for deposit
in U.S. dollars two business days prior to the first day interest on the advance
will begin to accrue plus 0.875%. The tender offer credit facility and the
bridge loan facility terminate not later than February 12, 1998. All advances
made under either facility are to be paid on or prior to the termination date.
Pursuant to the Merger Agreement, upon the acceptance by the Purchaser of a
majority of the outstanding shares of the Registrant's Common Stock pursuant to
the tender offer (and deposit by the Purchaser of funds sufficient to pay for
such shares), W. Donald Bell, Marcelo A. Gumucio, Keith A. Libbey and James E.
Ousley resigned from the Board of Directors of the Registrant. Grant A. Dove and
W. Douglas Hajjar continue to serve as directors of the Registrant. The
vacancies created by such resignations were filled by the appointment of Patrick
J. Welsh, Thomas E. McInerney and Rudolph E. Rupert. Pursuant to the Merger
Agreement, the Registrant has further agreed to use its best efforts to cause
individuals designated by the Purchaser to constitute the same percentage, on
each committee of the Board of Directors and on the Board of Directors of each
subsidiary of the Registrant, that they represent on the Board of Directors of
the Registrant.
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.
CONTROL DATA SYSTEMS, INC.
Date: August 26, 1997 By /s/ Joseph F. Killoran
Its Vice President and Chief Financial Officer