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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) October 18, 1996
INTERNATIONAL ALLIANCE SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25890 22-2769024
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10055 SWEET VALLEY DRIVE
VALLEY VIEW, OHIO 44125
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 447-9000
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With respect to each contract, agreement or other document referred to
herein and filed with the Securities and Exchange Commission as an exhibit to
this report, reference is made to the exhibit for a more complete description
of the matter involved, and each such statement shall be deemed qualified in
its entirety by such reference.
ITEMS 1 AND 2. CHANGES IN CONTROL OF REGISTRANT; ACQUISITION OR DISPOSITION OF
ASSETS
MERGERS. On October 18, 1996, International Alliance Services, Inc.
(formerly known as Republic Environmental Systems, Inc., the "Company"), issued
(i) 14,760,000 shares of common stock, $.01 par value per share ("Common
Stock"), of the Company, (ii) warrants to purchase an additional (a) 1,400,000
shares of Common Stock at $2.625 per share, (b) 1,400,000 shares of Common
Stock at $3.125 per share and (c) 1,400,000 shares of Common Stock at $3.875
per share and (iii) a promissory note in the principal amount of $4,000,000 to
Alliance Holding Corporation in exchange for all of the outstanding shares of
common stock of Century Surety Company ("CSC") and Commercial Surety Agency,
Inc., d/b/a Century Surety Underwriters ("CSU" and, together with CSC, the
"Alliance Companies"), each a Ohio corporation and wholly-owned subsidiary of
Alliance Holding Corporation ("Alliance"), pursuant to an Agreement and Plan of
Merger (as amended to date, the "Merger Agreement") dated as of May 19, 1996
among the Company, two wholly-owned, newly-created subsidiaries of the Company,
CSC, CSU and Alliance (the "Mergers"). Mr. Joseph E. LoConti, a director and
Vice Chairman of the Company, is also the Chairman of the Board, President and
controlling shareholder of Alliance.
STOCK ISSUANCES. On October 18, 1996, the Company issued and sold to
(i) H. Wayne Huizenga, for an aggregate purchase price of $5,250,000 (a) an
aggregate of 2,000,000 shares of Common Stock and (b) warrants to purchase an
additional (1) 2,000,000 shares of Common Stock at $2.625 per share, (2)
2,000,000 shares of Common Stock at $3.125 per share and (3) 2,000,000 shares
of Common Stock at $3.875 per share, pursuant to the terms set forth in a Stock
Purchase Agreement dated as of May 19, 1996 by and between the Company and H.
Wayne Huizenga and (ii) MGD Holdings Ltd., a Bermuda corporation controlled by
Mr. Michael G. DeGroote ("MGD Holdings"), and its permitted assigns, for an
aggregate purchase price of $5,250,000 (a) an aggregate of 2,000,000 shares of
Common Stock and (b) warrants to purchase an additional (1) 2,000,000 shares of
Common Stock at $2.625 per share, (2) 2,000,000 shares of Common Stock at
$3.125 per share and (3) 2,000,000 shares of Common Stock at $3.875 per share,
pursuant to the terms set forth in a Stock Purchase Agreement dated as of May
19, 1996 by and between the Company and MGD Holdings (such transactions are
referred to collectively as the "Stock Issuances" and, together with the
Mergers, the "Combination").
CHANGE OF CONTROL -- CHANGES IN SECURITY OWNERSHIP, BOARD COMPOSITION AND
MANAGEMENT
Upon consummation of the Combination, Alliance became the largest
stockholder of the Company and may effectively control the management and
operations of the Company. The following is a description of certain changes
that occurred with respect to the Company upon consummation of the Combination.
CHANGE IN SECURITY OWNERSHIP OF THE COMPANY. As a result of the
Combination, Alliance may be deemed to beneficially own 26,076,000 shares, or
78.6% of the outstanding shares of Common Stock, calculated in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Such shares include 7,116,000 shares owned of record by MGD Holdings
Ltd. ("MGD Holdings"), a Bermuda corporation controlled by Michael G. DeGroote,
the Chairman of the Company and the beneficial owner of 13,136,000 or 36.9% of
the outstanding shares of Common Stock, for which Alliance shares voting power
under a voting agreement, dated October 18, 1996 (the "Voting Agreement"),
between Alliance and MGD Holdings. Pursuant to the Voting Agreement, MGD
Holdings, for a period of two years from the date thereof, has agreed to vote
all shares of Common Stock held by MGD Holdings from time to time in accordance
with the recommendation of the management of Alliance. Accordingly, Alliance
has the ability to determine the outcome of any vote of the Company's
stockholders during this period.
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CHANGE IN THE COMPOSITION OF THE BOARD OF DIRECTORS OF THE COMPANY.
Immediately following the consummation of the Combination, the Board of
Directors was enlarged to seven members and Michael J. Occhionero resigned from
the Board of Directors and Messrs. Edward F. Feighan, Harve A. Ferrill, Richard
C. Rochon and Craig L. Stout were appointed to fill the vacancies on the Board
of Directors. Of the seven members of the Board, four of such members, Messrs.
LoConti, Feighan, Stout and Ferrill, were nominated by, and/or are affiliated
with, Alliance. Accordingly, Alliance has effective control of the Board of
Directors of the Company.
CHANGE IN THE COMPOSITION OF THE MANAGEMENT OF THE COMPANY. Upon
consummation of the Combination, Mr. LoConti was appointed Vice Chairman of the
Company, Mr. Feighan was appointed Chief Executive Officer and President of the
Company and Mr. Stout was appointed Executive Vice President and Chief
Operating Officer of the Company. Mr. DeGroote will continue as Chairman of
the Board of Directors of the Company. This management team will manage the
operations of the Company upon consummation of the Combination.
ITEM 5. OTHER EVENTS.
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION. In connection with
the Combination, on August 23, 1996, by written consent, a majority of the
outstanding shares of Common Stock approved the amendment of the Company's
Certificate of Incorporation to change the name of the Company from Republic
Environmental Systems, Inc. to International Alliance Services, Inc. and
increase the number of authorized shares of Common Stock from 20,000,000 to
100,000,000. Accordingly, on October 18, 1996, the Company filed a Certificate
of Amendment with the Delaware Secretary of State to effect such amendments to
the Company's Certificate of Incorporation.
ITEM 7. FINANCIAL INFORMATION AND EXHIBITS.
(a) The audited financial statements for the Alliance Companies
for the periods specified in Section 210- 3.05(b) under the
Exchange Act were filed with the Company's Definitive Schedule
14C Information Statement dated September 23, 1996 and are
incorporated herein by reference. Such financial statements
are filed herewith as Exhibit 99.8.
(b) The pro forma financial statements for the Company as provided
in Article 11 of Regulation S-X were filed with the Company's
Definitive Schedule 14C Information Statement dated September
23, 1996 and are incorporated herein by reference. Such
financial statements are filed herewith as Exhibit 99.8.
(c) The following exhibits are included herein pursuant to Item 7(c):
99.1 Agreement and Plan of Merger, dated as of May 19, 1996, by
and among the Company, Republic/CSA Acquisition
Corporation, Republic/CSU Acquisition Corporation,
Alliance, CSC and CSU (filed as Appendix I to the Company's
Definitive Schedule 14C Information Statement dated
September 23, 1996 and incorporated herein by reference).
99.2 Amendment No. 1 to Agreement and Plan of Merger, dated as
of July 25, 1996, by and among the Company, Republic/CSA
Acquisition Corporation, Republic/CSU Acquisition
Corporation, Alliance, CSC and CSU (filed as Appendix IV to
the Company's Definitive Schedule 14C Information Statement
dated September 23, 1996 and incorporated herein by
reference).
99.3 Amendment No. 2 to Agreement and Plan of Merger, dated as
of August 23, 1996, by and among the Company, Republic/CSA
Acquisition Corporation, Republic/CSU Acquisition
Corporation, Alliance, CSC and CSU (filed as Appendix V to
the Company's Definitive Schedule 14C Information Statement
dated September 23, 1996 and incorporated herein by
reference).
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99.4 Stock Purchase Agreement, dated as of May 19, 1996, by and
between the Company and H. Wayne Huizenga (filed as
Appendix II to the Company's Definitive Schedule 14C
Information Statement dated September 23, 1996 and
incorporated herein by reference).
99.5 Stock Purchase Agreement, dated as of May 19, 1996, by and
between the Company and MGD Holdings (filed as Appendix III
to the Company's Definitive Schedule 14C Information
Statement dated September 23, 1996 and incorporated herein
by reference).
99.6 Voting Agreement, dated as of October 18, 1996, by and
between MGD Holdings and Alliance.
99.7 Promissory Note, dated October 18, 1996, in the aggregate
principal amount of $4,000,000 issued by the Company
payable to Alliance.
99.8 The following audited financial statements for the Alliance
Companies for the periods specified in Section 210-3.05(b)
under the Exchange Act and the pro forma financial
statements for the Company pursuant to Article 11 of
Regulation S-X:
REPUBLIC ENVIRONMENTAL SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Condensed Balance Sheet as of June 30, 1996 . . . . . . . . . . . . . . . . . . . . F-3
Unaudited Pro Forma Condensed Statement of Operations:
Year ended December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Six months ended June 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Notes to Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6
CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
Report of Independent Public Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7
Consolidated and Combined Balance Sheets as of December 31, 1995 and 1994 . . . . . . . . . . . . . . . F-8
Consolidated and Combined Statements of Operations for the years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
Consolidated and Combined Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10
Consolidated and Combined Statements of Stockholders' Equity for the
years ended December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-11
Notes to Consolidated and Combined Financial Statements . . . . . . . . . . . . . . . . . . . . . . . F-12
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheet as of June 30, 1996 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . F-27
Consolidated Statements of Operations for the six months ended June 30, 1996
and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-28
Consolidated Statements of Cash Flows for the six months ended June 30, 1996
and 1995 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-29
Notes to Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . F-30
CENTURY SURETY COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-32
Consolidated Balance Sheets as of December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . F-33
Consolidated Statements of Income for the years ended December 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-34
Consolidated Statements of Shareholder's Equity for the years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-35
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Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-36
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-37
Schedule I -- Summary of Investments -- Other than Investments in Related
Parties as of December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-53
Schedule IV -- Reinsurance for the years ended December 31, 1995, 1994 and 1993 . . . . . . . . . . . F-54
Schedule VI -- Supplemental Information Concerning Property -- Casualty Insurance
Operation for the years ended December 31, 1995 1994 and 1993 . . . . . . . . . . . . . . . . . . . F-55
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheets as of June 30, 1996 (Unaudited) and
December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-56
Consolidated Statements of Income (Unaudited) for the six months
ended June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-57
Consolidated Statement of Cash Flows (Unaudited) for the six months ended
June 30, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-58
Notes to the Consolidated Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . F-59
COMMERCIAL SURETY AGENCY, INC.
FINANCIAL STATEMENTS
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-60
Balance Sheets as of December 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-61
Statements of Income for the years ended December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . F-62
Statements of Shareholder's Equity (Deficit) for the years ended
December 31, 1995, 1994 and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-63
Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993 . . . . . . . . . . . . F-64
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-65
FINANCIAL STATEMENTS (UNAUDITED)
Balance Sheets as of June 30, 1996 (Unaudited) and December 31, 1995 . . . . . . . . . . . . . . . . . F-69
Statements of Income (Unaudited) for the six months ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-70
Statements of Cash Flows (Unaudited) for the six months ended June 30, 1996
and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-71
Notes to the Financial Statements (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-72
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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.
INTERNATIONAL ALLIANCE SERVICES, INC.
Date: November 4, 1996 /s/ Edward F. Feighan
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Edward F. Feighan
President and Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT
NUMBER
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99.1 Agreement and Plan of Merger, dated as of May 19, 1996, by and
among the Company, Republic/CSA Acquisition Corporation,
Republic/CSU Acquisition Corporation, Alliance, CSC and CSU
(filed as Appendix I to the Company's Definitive Schedule 14C
Information Statement dated September 23, 1996 and
incorporated herein by reference).
99.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of
July 25, 1996, by and among the Company, Republic/CSA
Acquisition Corporation, Republic/CSU Acquisition Corporation,
Alliance, CSC and CSU (filed as Appendix IV to the Company's
Definitive Schedule 14C Information Statement dated September
23, 1996 and incorporated herein by reference).
99.3 Amendment No. 2 to Agreement and Plan of Merger, dated as of
August 23, 1996, by and among the Company, Republic/CSA
Acquisition Corporation, Republic/CSU Acquisition Corporation,
Alliance, CSC and CSU (filed as Appendix V to the Company's
Definitive Schedule 14C Information Statement dated September
23, 1996 and incorporated herein by reference).
99.4 Stock Purchase Agreement, dated as of May 19, 1996, by and
between the Company and H. Wayne Huizenga (filed as Appendix
II to the Company's Definitive Schedule 14C Information
Statement dated September 23, 1996 and incorporated herein by
reference).
99.5 Stock Purchase Agreement, dated as of May 19, 1996, by and
between the Company and MGD Holdings (filed as Appendix III to
the Company's Definitive Schedule 14C Information Statement
dated September 23, 1996 and incorporated herein by
reference).
99.6 Voting Agreement, dated as of October 18, 1996, by and between
MGD Holdings and Alliance.
99.7 Promissory Note, dated October 18, 1996, in the aggregate
principal amount of $4,000,000 issued by the Company payable
to Alliance.
99.8 The audited financial statements for the Alliance Companies
for the periods specified in Section 210-3.05(b) under the
Exchange Act and the pro forma financial statements for the
Company pursuant to Article 11 of Regulation S-X.