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: March 7, 2000
(Date of earliest event reported: February 25, 2000)
CAIS INTERNET, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-26103
(State or other jurisdiction of incorporation) (Commission File Number)
52-2066769
(IRS Employer Identification Number)
1255 22nd Street, N.W., Washington, D.C. 20037
(Address of Principal Executive Offices) (Zip Code)
202) 715-1300
(Registrant's telephone number, including area code)
With a copy to:
Morris F. DeFeo, Jr., Esq.
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W., Suite 5500
Washington, D.C. 20006-1888
Item 5. Other Events.
On February 28, 2000, the Registrant issued a press release announcing
that it had completed the sale of $73.9 million of Series D convertible
participating preferred stock ("Series D Shares") to an affiliate of Kohlberg
Kravis Roberts & Co. (KKR). KKR purchased the Registrant's Series D Shares on
February 25, 2000. Under a Preferred Stock Purchase Agreement dated as of
December 20, 1999 ("Purchase Agreement"), KKR will purchase an additional $26.1
million of Series D Shares after approval of the Registrant's stockholders. In
conjunction with the initial purchase of the Series D Shares, two KKR nominees
joined the Registrant's Board of Directors and KKR was granted a one-year option
to purchase $100 million of Series E convertible participating preferred stock
("Series E Shares"). The issuance of the Series E Shares pursuant to the option
also is subject to the approval of the Registrant's stockholders. Upon the
exercise of the option for the Series E Shares, KKR will have the right to elect
an additional director on the Registrant's Board of Directors.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
99.1 Press release of Registrant dated February 28, 2000.
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.
CAIS INTERNET, INC.
By: /s/ ULYSSES G. AUGER, II
-------------------------
Ulysses G. Auger, II
Chief Executive Officer and Chairman
Date: March 7, 2000
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press release of Registrant dated February 28, 2000.
EXHIBIT 99.1
Date: February 28, 2000
For Immediate Release
Media Contact: Minda Markle
(202) 715-1325
e-mail: m.markle@cais.com
CAIS INTERNET SUCCESSFULLY COMPLETES KKR INVESTMENT
WASHINGTON, D.C., February 28, 2000 - CAIS Internet (NASDAQ: CAIS) announced
today that it has successfully completed the sale of $73.9 million of
convertible preferred stock to an affiliate of Kohlberg Kravis Roberts & Co.
(KKR). KKR will purchase an additional $26.1 million of convertible preferred
stock upon receipt of shareholder approval of the issuance of the shares. Under
the terms of the agreement with CAIS, KKR also has a one-year option to purchase
an additional $100 million of convertible preferred stock. The issuance of
shares pursuant to the option is subject to shareholder approval. Holders of the
requisite number of shares needed for approval have agreed to vote in favor of
the issuance for both phases of the investment. In conjunction with the initial
investment, James H. Greene, Jr. and Alex Navab from KKR joined CAIS's Board of
Directors. In addition, assuming the exercise of KKR's option, KKR will have the
right to elect an additional seat on the Board.
Ulysses G. Auger II, Chief Executive Officer of CAIS Internet, said, "KKR's
investment in CAIS is a strong endorsement of our business and our strategies
for long-term success and value creation. Specifically, it will allow us to
accelerate our growth plans to meet the ever-increasing demand in the
hospitality and apartment marketplace for telephone and high-speed Internet
access solutions, and further cement CAIS's standing as a leading provider of
broadband Internet access solutions."
About CAIS Internet
CAIS Internet, Inc. (Nasdaq: CAIS) is a leading broadband access solutions
company. CAIS provides customers with comprehensive high speed Internet
solutions while at home in apartments, at work in small-to-medium businesses, or
on-the-go at hotels, airports, travel plazas, cruise ships and retail stores.
Whether it's an innovative solution for DSL & leased-line dedicated access,
creating an in-building network for multiple users, or providing a public area
Internet kiosk, the company delivers a cost-effective, easy and convenient
Internet experience for customers. The customer experience is the result of a
one-stop, integrated solutions package of innovative CAIS network access and
technologies, award-winning IPORT(TM) software, customer support, portal content
and systems.
CAIS Internet currently is the designated Internet access solution in the
largest footprint of hotels and apartment buildings nationwide. Additionally,
CAIS recently unveiled its portal with 110 leading Internet content partners,
which upon full installation of its properties will be the widest viewed in the
hospitality industry and multifamily or apartment community. The CAIS portal is
the first portal built at broadband speeds, especially designed to provide a
media-rich experience for the millions of CAIS customers who will log onto its
service.
Combined with CAIS Internet, the company's software subsidiary CAIS Software
Solutions, and its business center subsidiary Business Anywhere(TM), CAIS brings
broadband connectivity to markets where Internet access did not previously
exist.
CAIS Internet operates a Cisco-Powered, clear-channel Internet and ATM Network.
CAIS currently peers with public and private partners, and at national exchange
points MAE East, MAE East ATM, MAE West, and AADS. CAIS recently announced an
agreement with Qwest that expands the CAIS network to 38 POPs nationwide, which
accelerated CAIS network development one year ahead of forecast. Qwest also took
a 6.2% equity stake in the broadband solutions provider. CAIS Internet is
headquartered in Washington, DC. More information on the company is available by
calling 202.715.1300, or visiting the company's web site at www.cais.com.
About KKR
KKR (www.kkr.com) is an investment firm specializing in private equity
transactions. Since its founding in 1976, KKR has invested in excess of $13.5
billion of equity in more than 80 transactions with a total value of $96 billion
across more than 25 different industries. Its most recent transactions include
buyouts of Shoppers Drug Mart, Bosch Telecom and Wincor-Nixdorf; growth equity
investments in Birch Telecom, CAIS Internet, Intermedia, and Zhone Technologies;
and venture investments in BigVine.com, desktop.com. govWorks.com, MyPoints.com,
StarMedia Network and SupplierMarket.com. KKR has offices in New York City,
Menlo Park, California, and London.
# # #
This release contains statements relating to CAIS's future expectations and
business strategies or other "forward-looking" information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause actual results to differ materially from those contemplated by the
statements. Important factors that may cause actual results to differ from
projections include, among others: changes in business conditions; changes in
the Internet services industry and the general economy; our limited operating
history; our ability to manage rapid growth; our ability to enter into joint
ventures and other strategic relationships with companies on terms acceptable to
us; and the impact of computer and related problems that may arise from the Year
2000 problem on our business.
# # #
(C)2000 Copyright CAIS Internet. All Rights Reserved.