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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: January 7, 2000
EAGLE USA AIRFREIGHT, INC.
(Exact name of registrant as specified in its charter)
0-27288 TEXAS 76-0094895
(Commission File Number) (State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
15350 VICKERY DRIVE
HOUSTON, TEXAS 77032
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 618-3100
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 7, 2000, Eagle USA Airfreight, Inc. (the "Company")
completed the acquisition of Commercial Transport International (Canada) Ltd.
("CTI") and Fastair Cargo Systems Ltd. ("Fastair"). Fastair is a leading
forwarder in the intra-Canada freight forwarding market. CTI, its sister
company, primarily serves the international freight forwarding market with
offices coast-to- coast throughout Canada. CTI and Fastair were privately-held,
under common control and have eight locations in Canada. Both companies are
based in Toronto, Canada. The acquired operations will be integrated with the
Company's existing Canadian operations.
On December 14, 1999, the Company entered into a Stock Purchase
Agreement (the "CTM-Ontco Stock Purchase Agreement") with Eagle Canada
Airfreight, Inc., an Ontario, Canada corporation ("Buyer"), and Ajay Virmani,
individually and in his capacity as trustee, Raymon Lord, Christopher Ralphs and
Dan Mills (each a "Seller" and collectively, the "Sellers") whereby the Buyer
would acquire directly or indirectly from the Sellers all of the issued and
outstanding capital stock of Commercial Transport Management Ltd., an Ontario,
Canada corporation ("CTM"), and 1215650 Ontario Limited, an Ontario, Canada
corporation ("Ontco"). Prior to the closing, CTM and Ontco effected an
amalgamation to form a new entity that was purchased by the Company and which
owns all of the outstanding shares of Fastair.
Also on December 14, 1999, the Company entered into a Stock Purchase
Agreement (the "CTI Stock Purchase Agreement" and together with the CTM-Ontco
Stock Purchase Agreement, the "Stock Purchase Agreements") with the Buyer, CTM
and Ajay Virmani, Christopher Ralphs and Raymon Lord whereby the Buyer would
acquire directly or indirectly from CTM all of the issued and outstanding shares
of CTI (together with CTM and Ontco, the "Acquired Entities").
The consideration under the CTM-Ontco Stock Purchase Agreement was
comprised of (i) Cdn.$27,960,000 paid at the closing of the transactions
thereunder, (ii) Cdn.$7,200,000 to be paid in three equal installments of
Cdn.$2,400,000 on each of the first three anniversaries of such closing, and
(iii) an additional contingent amount of up to Cdn. $11,500,000 made in three
payments to be paid in cash and shares of the Company's common stock, based upon
the achievement of certain targets as provided in the CTM-Ontco Stock Purchase
Agreement relating to, among other things, the growth in earnings before
interest, income taxes, depreciation and amortization of the combined operations
of the Acquired Entities and the Company's Canadian operations. The
consideration under the CTM-Ontco Stock Purchase Agreement was determined by
negotiations between the Company and the Sellers. There was no material
relationship between the Company and the Sellers prior to the transactions under
the CTM-Ontco Stock Purchase Agreement.
The consideration under the CTI Stock Purchase Agreement was
Cdn.$3,500,000 paid at the closing thereunder. The consideration under the CTI
Stock Purchase Agreement was determined by negotiations between the Company and
CTM. There was no material relationship between the Company and CTM prior to the
transactions under the CTI Stock Purchase Agreement.
The Company's source of funds for the payments made at closing was cash
and cash equivalents on hand. The payments made by the Company at the closing
totaled U.S. $21,320,000.
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The foregoing description of the Stock Purchase Agreements is
qualified in its entirety by reference to the Stock Purchase Agreements, copies
of which are attached as exhibits hereto and are incorporated by reference
herein in their entirety.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1 Stock Purchase Agreement, dated as of December 14, 1999,
between the Company, Buyer and the Sellers.
99.2 Stock Purchase Agreement, dated as of December 14, 1999,
between the Company, Buyer, CTM and Ajay Virmani, Christopher
Ralphs and Raymon Lord.
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SIGNATURE
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.
EAGLE USA AIRFREIGHT, INC.
By: /s/ ELIJIO V. SERRANO
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Elijio V. Serrano
Chief Financial Officer
Date: January 18, 2000
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INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
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99.1 Stock Purchase Agreement, dated as of December 14, 1999,
between the Company, Buyer and the Sellers.
99.2 Stock Purchase Agreement, dated as of December 14, 1999,
between the Company, Buyer, CTM and Ajay Virmani, Christopher
Ralphs and Raymon Lord.