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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 19, 1998
CARNEGIE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-26964 25-1435252
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
FIVE PPG PLACE, PITTSBURGH, PA 15222
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 412-642-6900
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Item 2. Acquisition or Disposition of Assets.
On March 19, 1998, pursuant to a Share Purchase Agreement (the
"Purchase Agreement"), dated March 19, 1998, by and among Carnegie Group, Inc.
("CGI"), Advantage KBS, Inc. ("Advantage"), and DeJean Melancon and Eileen
Weinstein, CGI acquired all the outstanding capital stock of Advantage from the
shareholders of Advantage for a purchase price of $5m plus an additional
contingent payment of up to $2.5m, depending on revenue and earnings of
Advantage for the year ending December 31, 1998.
Advantage provides problem resolution software and customer support
applications for the telecommunications, computer hardware and software, and
consumer electronics industries. CGI intends to continue such business.
The purchase price was determined based on arm's length negotiations
between CGI and Advantage. CGI funded the purchase of the shares of Advantage
from current cash balances. CGI anticipates that it will write-off a significant
portion of the purchase price as "in-process research and development."
The acquisition of Advantage is subject to certain risks. The
integration of companies in the information technology services industry may be
more difficult to achieve than in other industries. There can be no assurance
that the acquisition of Advantage will result in any business or financial
benefits to the Company. The realization of any such benefits requires, among
other things, that the operations of Advantage be successfully integrated with
those of the Company in a timely manner. The successful integration of the
Company and Advantage will require the coordination of research and development
and sales and marketing efforts. The difficulties of such integration may be
increased by the need to coordinate geographically separated organizations and
integrating personnel with disparate business backgrounds. In addition, the
Company's senior management has not had previous experience in integrating
acquisitions. There can be no assurance that the Company will be able
successfully to manage the integration of Advantage.
For other risk factors affecting the Company, reference is made to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) It is impracticable at the time of filing this Current Report on Form
8-K to provide the financial statements of the acquired business required to be
filed by Item 7(a) of Form 8-K. In accordance with paragraph (a)(4) of Form 8-K,
the financial statements of the acquired business shall be filed as an amendment
to this Current Report on Form 8-K as soon as practicable and not later than
June 2, 1998.
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(b) It is impracticable at the time of filing this Current Report on Form 8-K to
provide the pro forma financial information relative to the acquired business
required to be filed by Item 7(b) of Form 8-K. In accordance with paragraph
(b)(2) of Item 7 of Form 8-K, the pro forma financial information relative to
the acquired business shall be filed as an amendment to this Current Report on
Form 8-K as soon as practicable and not later than June 2, 1998.
(c) Exhibits.
Exhibit No. Description
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2.1 Share Purchase Agreement, dated
March 19, 1998, by and among
Carnegie Group, Inc., Advantage,
KBS, Inc., and DeJean Melancon and
Eileen Weinstein.
99.1 Press Release dated March 20, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
Carnegie Group, Inc.
Date: March 30, 1998 By: /s/ JOHN W. MANZETTI
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John W. Manzetti
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Sequential
Exhibit No. Exhibit Page No.
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2.1 Share Purchase Agreement, dated March 19
1998, by and among Carnegie Group, Inc.,
Advantage, KBS, Inc., and DeJean Melancon
and Eileen Weinstein.
99 Press Release dated March 20, 1998
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