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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) August 23, 2000
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John H. Harland Company
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(Exact name of registrant as specified in its charter)
Georgia 1-6352 58-0278260
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2939 Miller Road, Decatur, Georgia 30035
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 981-9460
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Item 2. Acquisition or Disposition of Assets
On August 23, 2000, JH Acquisition Corp.(the "Offeror"), an Oregon
corporation and a wholly owned subsidiary of John H. Harland Company
("Harland"), acquired approximately 5,287,029 shares (including 104,934 shares
tendered pursuant to notices of guaranteed delivery) of common stock, no par
value (the "Shares"), of Concentrex Incorporated, an Oregon corporation
("Concentrex"). These acquired Shares represented approximately 94.3% of
Concentrex's outstanding shares and were acquired pursuant to a cash tender
offer made to all holders of outstanding Shares for a price of $7.00 per Share,
upon the terms and subject to the conditions set forth in the offer to purchase
and in the related letter of transmittal (which, together with any amendments or
supplements thereto, collectively constituted the "Offer"), each dated July 21,
2000. The Offer, which commenced on July 21, 2000, expired at 12:00 midnight on
Tuesday, August 22, 2000.
Concentrex, based in Portland, Oregon, is a leading provider of
technology-powered solutions to deliver financial services, including a broad
range of traditional software and services integrated with e-commerce solutions.
Concentrex serves over 5,500 financial institutions of all types and sizes in
the United States. Concentrex has major offices in 11 additional cities across
the country.
On August 25, 2000, upon Harland's request pursuant to an agreement and
plan of merger (the "Merger Agreement"), dated as of July 17, 2000, among
Harland, the Offeror and Concentrex and in accordance with the Oregon Business
Corporation Act (the "OBCA"), the parties to the Merger Agreement effected a
merger between the Offeror and Concentrex (the "Merger") without a meeting of
Concentrex's stockholders in accordance with Section 60.491 of the OBCA.
Following the Merger, Concentrex continued as the surviving corporation (the
"Surviving Corporation") and became a wholly owned subsidiary of Harland, and
the separate corporate existence of the Offeror ceased. As of the effective time
of the Merger (the "Effective Time"), each Share outstanding immediately prior
to the Effective Time (other than Shares owned by Harland or any other direct or
indirect wholly owned subsidiary of Harland, which were canceled) was converted
into the right to receive from the Surviving Corporation the offer price of
$7.00 net to the seller in cash, less any required withholding taxes and without
interest thereon (the "Offer Price"). The Offer Price was determined through
negotiations between Concentrex's management and Harland's management.
The total amount of funds required to purchase all outstanding Shares
(on a fully diluted basis) pursuant to the Offer and to pay estimated fees and
expenses related to the Offer and the Merger was approximately $140 million. The
Offeror obtained all funds needed for the Offer and the Merger through capital
contributions or advances made by Harland. Harland obtained approximately $50
million of the funds for such capital contributions or advances from its
available cash and from working capital and the remainder from a new
credit facility between Harland, SunTrust Bank ("SunTrust"), SunTrust Equitable
Corporation ("SunTrust Equitable") and other lenders from time to time party
thereto.
The foregoing description of the acquisition does not purport to be
complete and is qualified in its entirety by reference to the offer to purchase,
which was filed by Harland and the Offeror as an exhibit to their tender offer
statement on Schedule TO, as amended, and which is incorporated by reference
herein as Exhibit 99.1 to this Current Report on Form 8-K. A copy of the press
release announcing the completion of the Offer and the scheduled date for the
Merger, also filed by Harland and the Offeror as an exhibit to their tender
offer statement on the Schedule TO, as amended, is incorporated by reference
herein as Exhibit 99.2 to this Current Report on Form 8-K.
ITEM 5. Other events.
On August 23, 2000, SunTrust, Harland and the lenders from time to time
party thereto entered into a Revolving Credit Agreement (the "Credit Agreement")
with respect to a $325,000,000 senior revolving credit facility (the "Credit
Facility"). SunTrust initially underwrote the Credit Facility through a
commitment of $225,000,000 and, together with SunTrust Equitable, will
subsequently arrange a
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syndicate of lenders to issue commitments to Harland to establish the remaining
portion of the Credit Facility and to reduce the SunTrust commitment. Under the
Credit Agreement, SunTrust Equitable will manage all aspects of the syndication,
in consultation with SunTrust and Harland where commercially reasonable,
including the timing of all offers to potential lenders, the allocation of
commitments and the determination of compensation and titles given, if any, to
such lenders. The Credit Facility is unsecured, but Harland has agreed that it
will not pledge any of its assets to other creditors (subject to customary
exceptions). The terms of the Credit Agreement also contain conditions
precedent, representations, warranties, covenants, events of default and other
provisions customary for such financings. The Credit Facility will terminate on
August 23, 2005.
In connection with the Credit Agreement, SunTrust, as administrative
agent, Harland and certain domestic subsidiaries of Harland entered into an
Indemnity, Subrogation and Contribution Agreement dated as of August 23, 2000.
Also, SunTrust, as administrative agent, and certain domestic subsidiaries of
Harland entered into a Subsidiary Guarantee Agreement dated as of August 23,
2000. Additionally, under the terms of the Credit Agreement, all present and
future direct and indirect wholly owned domestic subsidiaries of Harland
(including, after the consummation of the Merger, Concentrex and its
subsidiaries) must be or become parties to the Subsidiary Guarantee Agreement
and the Indemnity, Subrogation and Contribution Agreement. To evidence the debt
subject to the terms and conditions of the Credit Agreement, Harland issued a
Revolving Credit Note in the aggregate principal amount of $225,000,000 and a
Swingline Note in the aggregate principal amount of $20,000,000, which were both
in favor of SunTrust and dated as of August 23, 2000.
Under the Credit Agreement, Harland will be entitled to select between
the following interest rate options: (i) the base rate or (ii) a rate based on
LIBOR. The base rate will be equal to the higher of (i) the rate which SunTrust
announces from time to time as its prime lending rate or (ii) the federal funds
rate plus one-half of one percent per annum. The initial interest rate was
7.62% per annum.
Pursuant to the terms of Credit Agreement, Harland has undertaken
financial covenants with respect to (i) maintenance of total debt to earnings
before interest, taxes, depreciation and amortization ("EBITDA") and fixed
charge coverage ratios and (ii) maintenance of minimum net worth. Harland will
also comply with customary financial reporting requirements.
Harland also made affirmative covenants, subject to normal exceptions
and qualifications, with respect to (i) maintenance of corporate existence as
well as material patents, trademarks, franchises, and other intellectual
property rights; (ii) compliance with laws and regulations; (iii) payment of tax
obligations and similar claims; (iv) maintenance of proper books and records;
(v) permitting visitation and inspection of properties, examination of books and
records as well as discussion with officers and accountants; (vi) maintenance of
property and insurance; (vii) use of proceeds and compliance with margin
regulations; and (viii) notification of creation or acquisition of new
subsidiaries and provision of subsidiary guarantees from new wholly owned
domestic subsidiaries.
In addition, Harland has undertaken negative covenants, subject to
normal exceptions and qualifications, with respect to (i) restrictions on
incurring or permitting to exist indebtedness; (ii) restrictions on granting or
permitting to exist liens and security interests; (iii) restrictions on mergers,
consolidations, sale of all or substantially all assets of Harland or any
subsidiary or the stock of any subsidiary; (iv) restrictions on engaging in
business other than businesses of the type conducted by Harland and its
subsidiaries and businesses reasonably related thereto; (v) restrictions on
investments and acquisitions; (vi) restrictions on dividends and other
distributions related to common stock and on any repurchase, redemption or
defeasance of any common stock of Harland or any options, warrants, or other
rights to purchase such common stock, to the extent that a default or event of
default exists or would be caused thereby; (vii) restrictions on dispositions of
assets; (viii) restrictions on affiliate transactions; (ix) restrictions on
agreements that prohibit or limit (A) the amount of dividends or loans that may
be paid or made to Harland by any of its wholly owned subsidiaries or (B) the
ability of Harland or any of its wholly owned subsidiaries to grant any liens on
any of its property; (ix) restrictions on sale/leaseback transactions; (x)
restrictions on amendments or modifications to Harland's or any guarantor's
organizational
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documents; (xi) restrictions on change in fiscal year or significant change in
accounting practices; and (xii) restrictions against entering into speculative
hedging agreements.
The proceeds from the Credit Facility have been or will be used to
refinance existing debt (including Harland's existing Senior A notes of $85
million and term loan of $15 million), for the acquisition of Concentrex, for
future permitted acquisitions and for working capital and general corporate
purposes.
The foregoing description of the Credit Facility does not purport to be
complete and is qualified in its entirety by reference to the Credit Agreement;
the Indemnity, Subrogation and Contribution Agreement; the Subsidiary Guarantee
Agreement; the Revolving Credit Note; and the Swingline Note; a copy of
each is attached and incorporated by reference herein as Exhibit 10.1, Exhibit
10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 10.5, respectively, to this Current
Report on Form 8-K.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute Forward-looking
Statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
each as amended by the Private Securities Litigation Reform Act of 1995. Those
statements include statements regarding the intent, belief or current
expectations of Harland and members of its management team as well as the
assumptions on which such statements are based. Any such Forward-looking
Statements are not guarantees of future performance and Harland's actual results
could differ materially from those set forth in such Forward-looking Statements.
Factors currently known to management that could cause actual results to differ
materially from those set forth in such Forward-looking Statements include risks
detailed from time to time in Harland's filings with the Securities and Exchange
Commission, including Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and Annual Reports on Form 10-K. Harland undertakes no obligation to update
or revise Forward-looking Statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating results over
time.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired
To be filed by Amendment to this Current Report on
Form 8-K no later than November 6, 2000.
(b) Pro Forma Financial Information
To be filed by Amendment to this Current Report on
Form 8-K no later than November 6, 2000.
(c) Exhibits
10.1 Revolving Credit Agreement, dated August 23, 2000,
among Harland, as borrower, the lenders from time to
time party thereto and SunTrust, as Administrative
Agent
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10.2 Indemnity, Subrogation and Contribution Agreement,
dated as of August 23, 2000, among SunTrust, as
administrative agent, Harland and certain domestic
subsidiaries of Harland
10.3 Subsidiary Guarantee Agreement, dated as of August
23, 2000, among SunTrust, as administrative agent,
and certain domestic subsidiaries of Harland
10.4 Revolving Credit Note, dated as of August 23, 2000,
in the aggregate principal amount of $225,000,000
made by Harland in favor of SunTrust
10.5 Swingline Note, dated as of August 23, 2000, in the
aggregate principal amount of $20,000,000 made by
Harland in favor of SunTrust
99.1 Offer to Purchase, dated July 21, 2000 (incorporated
by reference to Exhibit (a)(1) to the Schedule TO
filed by Harland and the Offeror, dated July 21,
2000, as amended)
99.2 Press Release, dated August 23, 2000 (incorporated by
reference to Exhibit (a)(15) to the Schedule TO filed
by Harland and the Offeror, dated July 21, 2000, as
amended)
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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 thereunto duly authorized.
JOHN H. HARLAND COMPANY
(Registrant)
Date: September 7, 2000 By: /s/ John C. Walters
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Name: John C. Walters
Title: Vice President
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EXHIBIT INDEX
Exhibit No. Exhibit Name
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10.1 Revolving Credit Agreement, dated August 23, 2000, among
Harland, as borrower, the lenders from time to time party
thereto and SunTrust, as Administrative Agent
10.2 Indemnity, Subrogation and Contribution Agreement, dated as of
August 23, 2000, among SunTrust, as administrative agent,
Harland and certain domestic subsidiaries of Harland
10.3 Subsidiary Guarantee Agreement, dated as of August 23, 2000,
among SunTrust, as administrative agent, and certain domestic
subsidiaries of Harland
10.4 Revolving Credit Note, dated as of August 23, 2000, in the
aggregate principal amount of $225,000,000 made by Harland in
favor of SunTrust
10.5 Swingline Note, dated as of August 23, 2000, in the aggregate
principal amount of $20,000,000 made by Harland in favor of
SunTrust
*99.1 Offer to Purchase, dated July 21, 2000 (incorporated by
reference to Exhibit (a)(1) to the Schedule TO filed by
Harland and the Offeror, dated July 21, 2000, as amended)
*99.2 Press Release, dated August 23, 2000 (incorporated by
reference to Exhibit (a)(15) to the Schedule TO filed by
Harland and the Offeror, dated July 21, 2000, as amended)
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* Previously filed.
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