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) May 5, 2000
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LERNOUT & HAUSPIE SPEECH PRODUCTS N.V.
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(Exact Name Of Registrant As Specified In Its Charter)
The Kingdom of Belgium
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(State or Other Jurisdiction of Incorporation)
0-27296 N/A
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(Commission File Number) (I.R.S. Employer Identification No.)
52 Third Avenue, Burlington, Massachusetts 01803
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(Address of Principal Executive Offices in the U.S.) (Zip Code)
(781) 203-5000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
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On May 5, 2000, we acquired all of the outstanding capital stock of
Dictaphone Corporation ("Dictaphone") through a merger of Dictaphone into one of
our wholly-owned subsidiaries. In connection with the merger we issued a total
of approximately 9.4 million shares of our common stock (adjusted for our
recent stock split) in exchange for all of the outstanding shares of Dictaphone
common stock. We were also required to assume or refinance approximately $430
million of Dictaphone's debt and other obligations. We determined this
consideration through arm's length negotiation with Dictaphone and the
stockholders of Dictaphone. We will use the purchase method to account for this
acquisition.
Dictaphone is a leader in selected vertical markets in the development,
manufacture, marketing, service and support of integrated voice and data
management systems and software, including dictation, voice processing, voice
response, unified messaging, records management, call center monitoring systems
and communications recording. Dictaphone has two operating segments, System
Products and Services and Contract Manufacturing. The System Products and
Services segment consists of the sale and service of system-related products to
dictation and voice management and communications recording system customers in
selected vertical markets. The Contract Manufacturing segment consists of the
manufacturing operations which provides outside electronics manufacturing
services to original equipment manufacturers in the telecommunication, data
management, computer and electronics industries. We intend to continue the
business of Dictaphone.
The shares to be issued in the merger initially have not been registered
under the Securities Act of 1933, as amended, and will be subject to
restrictions on transfer as set forth in that Act and the rules and regulations
of the Securities and Exchange Commission. We have granted the stockholders of
Dictaphone registration rights for the shares of our common stock which they
received in the merger. Stonington Capital Appreciation Fund 1994, L.P., which
owned approximately 96% of the issued and outstanding Dictaphone common stock,
has agreed to hold approximately 1.8 million shares of our common stock which it
received in the Merger for a period of two years.
During the two year period following the Merger, Stonington has assigned
certain voting rights to all the shares it acquired in the Merger, for so long
as it holds the shares, to an entity controlled by Messrs. Jo Lernout and Pol
Hauspie. In addition, subject to conditions, we have agreed to nominate a
designee of Stonington for election as one of our directors, and entities
controlled by Messrs. Lernout and Hauspie have agreed to vote their shares to
elect that nominee.
Dresdner Bank Luxembourg S.A., Deutche Bank N.V., Artesia Banking
Corporation N.V., KBC Bank N.V. and Fortis Bank N.V., collectively, provided
financing arrangements for the acquisition consisting of a $200 million short-
term debt facility and a $230 million five year declining balance facility. In
addition, we have obtained an ongoing $20 million revolving credit facility
for Dictaphone. We have accessed all of the short-term facility and
approximately $30 million under the declining balance facility in order to
satisfy approximately $230 million in Dictaphone's debt and other obligations in
connection with the closing of the merger, as well as to cover costs of the
transaction. The remaining committed amount will be available to repay $200
million of Dictaphone's senior
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subordinated notes, should they be put to the company within 90 days of the
closing by the noteholders at 101% of par, as permitted by the terms of the
notes. These notes are also redeemable by Dictaphone at a declining rate
beginning at 105.875% of par, commencing in August 2000.
Prior to the transaction described above, neither Dictaphone nor the
stockholders of Dictaphone had any material relationship with us or any of our
affiliates, directors or officers or any associate of any such director or
officer.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of business acquired:
Not filed herewith. To be filed by amendment not later than 60 days after
this report is filed.
(b) Pro Forma financial information:
To be filed by amendment.
(c) Exhibits:
2. Agreement and Plan of Merger, dated as of March 7, 2000, by and
among the Registrant, Dark Acquisition Corp., a Delaware corporation
and a direct, wholly owned subsidiary of the Registrant and
Dictaphone Corporation, a Delaware corporation.
4.1 Registration Rights Agreement, dated as of May 5, 2000, by and
among the Registrant, Stonington Holdings, LLC, Mellon Bank, N. A.,
as Trustee for the Bell Atlantic Master Trust, Merrill Lynch KECALP,
L.P. 1994, John Duerden, Robert G. Schwager, Joseph Skrzypczak,
Ronald Elwell, Thomas Hodge, Daniel Hart and Egon Jungheim.
4.2 Stockholders' Agreement, dated as or May 5, 2000, by and among
the Registrant, Stonington Holdings, LLC, LEHA, Light Holding N.V.,
L&H Holding III, OLDCO N.V. and L&H Investment Company.
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SIGNATURE
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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, thereunto duly authorized.
LERNOUT & HAUSPIE SPEECH
PRODUCTS N.V.
Dated: May 22, 2000
By:/s/ Carl Dammekens
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Carl Dammekens
Chief Financial Officer and Senior Vice
President of Finance
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