SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
FILED PURSUANT TO SECTION 13 OR 15(D)
OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 8, 1998
CMG INFORMATION SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-22846 04-2921333
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION
NO.)
100 BRICKSTONE SQUARE ANDOVER, MA 01810
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (978) 684-3600
1
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
- ----------------------------------------------
On April 9, 1998, CMG Information Services, Inc. (the "Company"), a
Delaware corporation, acquired all the issued and outstanding shares of capital
stock of Accipiter, Inc. ("Accipiter"), a Delaware corporation, pursuant to a
merger of CMGI Acquisition Corporation, a Delaware corporation and wholly-owned
subsidiary of the Company, with and into Accipiter (the "Merger"), with
Accipiter becoming the surviving corporation and a wholly-owned subsidiary of
the Company. Accipiter is a Raleigh, North Carolina-based company specializing
in the development of software tools for the management of advertising over the
Internet. The acquisition was consummated pursuant to an Agreement and Plan of
Merger (the "Merger Agreement") dated April 8, 1998 among the Company, CMGI
Acquisition Corporation, Accipiter and certain stockholders of Accipiter. The
Company expects to ultimately merge Accipiter with the Company's subsidiary,
Engage Technologies, Inc.
The acquisition will be accounted for as a purchase. The purchase price
will be allocated to the assets acquired and liabilities assumed based on their
estimated fair values. Results of operations for Accipiter will be included in
the Company's consolidated operating results for periods subsequent to the date
of acquisition.
In the Merger, all outstanding shares of Common Stock and Preferred Stock
of Accipiter and vested rights to purchase Common Stock and Preferred Stock of
Accipiter were converted into approximately 632,000 shares of Common Stock, par
value $0.01 per share, of the Company (the "CMG Shares"). All unvested rights to
purchase Common Stock and Preferred Stock of Accipiter have been cancelled after
the Merger or provided for under the terms of the two escrow agreements
described below.
The CMG Shares are not registered under the Securities Act of 1933 and are
subject to either Non-Employee Investment Representation and Lockup Letters or
Employee Investment Representation and Lockup Letters (together, the "Lockup
Agreements"). The Lockup Agreements prohibit transfer of the CMG Shares,
without the permission of the Company, for periods ranging from six to twenty-
four months. The holders of the CMG Shares are entitled to two required
registrations under Form S-3 after six and twelve months from the date of the
Merger Agreement, as well as certain other registration rights, with respect to
CMG Shares no longer subject to the Lockup Agreements.
Under the terms of the Merger Agreement and related Non-Employee and
Employee Stockholder Escrow Agreements, an aggregate of 91,655 of the CMG Shares
will be held in escrow for the purpose of indemnifying the Company against
certain liabilities of Accipiter and its stockholders. Additionally, the
Employee Stockholder Escrow Agreement provides for the forfeiture to the Company
of a portion of the CMG Shares in the event that Accipiter does not meet certain
performance targets. The Employee Stockholder Escrow Agreement and Non-Employee
Stockholder Escrow Agreement expire twelve and twenty-four months after April 8,
1998, respectively.
2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
- ---------------------------------------------------------------------------
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(a) will be filed by amendment within 60
days of the date of this filing.
(B) PRO FORMA FINANCIAL INFORMATION
Pursuant to the instructions to Item 7 of Form 8-K, the financial
information required by Item 7(b) will be filed by Amendment within 60
days of the date of this filing.
(C) EXHIBITS
2.1* Agreement and Plan of Merger dated as of April 8, 1998 among CMG
Information Services, Inc., CMGI Acquisition Corporation,
Accipiter, Inc., and Certain Stockholders of Accipiter, Inc.
Named Herein. Pursuant to Item 602 (b)(2) of Regulation S-K,
the schedules and certain exhibits to the Agreement and Plan of
Merger are omitted. A list of such schedules and exhibits appear
in the table of contents to the Agreement and Plan of Merger.
The Registrant hereby undertakes to furnish supplementally a
copy of any omitted schedule or exhibit to the Commission upon
request.
2.2* Employee Stockholder Escrow Agreement dated April 8, 1998.
2.3 Non-Employee Stockholder Escrow Agreement dated April 8, 1998.
2.4 Employee Investment Representation and Lockup Letters dated
April 8, 1998.
2.5 Non-Employee Investment Representation and Lockup Letters dated
April 8, 1998.
2.6 Registration Rights Agreement dated April 8, 1998.
* Confidential treatment requested.
3
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.
CMG INFORMATION SERVICES, INC.
(Registrant)
/s/ Andrew J. Hajducky III
---------------------------
April 23, 1998 Andrew J. Hajducky III, CPA
Chief Financial Officer and Treasurer
4