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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 12, 2001
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO THE
SCHEDULE 14C
(RULE 14c-101)
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
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CHECK THE APPROPRIATE BOX:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14C-5(d)(2))
[X] Definitive Information Statement
NEW ERA OF NETWORKS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Payment of Filing Fee (check the appropriate box): [ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies: Common
Stock, par value $0.0001 per share of New Era of Networks, Inc.
(2) Aggregate number of securities to which transaction applies: 9,059,247
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(Set forth the amount on which the filing fee is calculated and state
how it was determined): $6.03, based on the average of the high and low
prices of New Era of Networks, Inc. common stock as reported on The
Nasdaq National Market on May 1, 2001.
(4) Proposed maximum aggregate value of transaction: $54,627,260
(5) Total fee paid: $10,926*
[ ] Fee paid previously with preliminary materials
[X] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: $62,694
(2) Form, Schedule or Registration Statement No.: Form S-4, 333-57102
(3) Filing Party: Sybase, Inc.
(4) Date Filed: March 15, 2001
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* This amount is completely offset by the $62,694 fee previously paid in
connection with the filing of the Form S-4 by Sybase, Inc. on March 15, 2001,
in connection with the first step of the transactions of which the merger that
is the subject of this information statement is a part.
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The unaudited pro forma combined condensed financial statements are hereby
amended as follows:
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
for the three month period ended March 31, 2001, give effect to the contemplated
merger between Sybase and NEON accounted for as a purchase business combination.
On February 20, 2001 Sybase entered into a reorganization agreement with
NEON for consideration estimated to be approximately $339.3 million as of such
date, consisting of approximately 14.3 million shares of Sybase common stock
valued at $318.0 million and approximately 3.0 million options to purchase
Sybase common stock valued at $16.3 million, and estimated direct acquisition
costs of $5.0 million. The estimated direct acquisition costs consist primarily
of investment banking fees, legal and accounting fees, regulatory filing and
printing costs to be incurred by Sybase which are directly related to the offer
and the merger.
On April 11, 2001, the initial offering period for NEON shareholders to
tender their shares expired. At that date, Sybase had acquired approximately 75
percent of NEON's outstanding shares. A subsequent offering period commenced on
April 12, 2001, and expired on April 26, 2001. As of April 26, 2001, Sybase had
acquired approximately 80 percent of all outstanding NEON shares. Sybase is
currently preparing to complete the acquisition through a "long-form" merger,
which calls for a meeting of the NEON shareholders on June 18, 2001 to vote on
the merger.
The actual consideration for the merger with NEON cannot yet be determined
since the merger has not been completed. There can be no assurance that Sybase
and NEON will not incur additional charges related to the merger or that
management will be successful in its efforts to integrate the operations of the
two companies. For the purpose of the following pro forma financial information,
the number of shares of Sybase common stock assumed to be issued in the merger
with NEON is approximately 14.3 million. This amount is based on the number of
common shares of NEON outstanding as of April 11, 2001, the date Sybase acquired
control of NEON. Similarly, the estimated value of options to purchase Sybase
common stock to be issued in the merger with NEON is based on the outstanding
options to purchase shares of NEON common stock as of April 11, 2001. The actual
number of shares of Sybase common stock to be issued will be based on the actual
outstanding common shares and options of NEON as of the date of completion of
the merger.
The unaudited pro forma combined condensed balance sheet combines the
unaudited historical condensed balance sheets of Sybase and NEON as of March 31,
2001. The unaudited pro forma combined condensed statements of operations give
effect to the proposed merger between Sybase and NEON, as if it had occurred on
January 1, 2001. The unaudited pro forma combined condensed statement of
operations for the three months ended March 31, 2001 combines the unaudited
historical statements of operations of Sybase and NEON for the three months
ended March 31, 2001. The unaudited pro forma combined condensed financial
statements do not include the realization of cost savings from operating
efficiencies, synergies or other restructurings that may result from the merger.
The pro forma information is presented for illustrative purposes only and
is not necessarily indicative of the operating results or financial position
that would have occurred if the merger and the acquisition had been consummated
at the beginning of the earliest period presented, nor is it necessarily
indicative of future operating results or financial position. The pro forma
adjustments are based upon information and assumptions available at the time of
the filing of this document. The pro forma information should be read in
conjunction with the accompanying notes thereto, Sybase's historical financial
statements and related notes thereto incorporated by reference in this
information statement, and NEON's historical financial statements and related
notes thereto incorporated by reference in this information statement.
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SYBASE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 2001
(IN THOUSANDS)
PRO FORMA PRO FORMA
SYBASE NEON COMBINED ADJUSTMENTS COMBINED
--------- --------- ---------- ----------- ----------
Current assets:
Cash and cash equivalents........ $234,146 $ 28,384 $ 262,530 $ -- $ 262,530
Short-term cash investments...... 57,748 16,408 74,156 -- 74,156
-------- --------- ---------- ----------
Total cash, cash equivalents
and short-term cash
investments................. 291,894 44,792 336,686 -- 336,686
Accounts receivable, net......... 169,303 30,253 199,556 -- 199,556
Deferred income taxes............ 28,566 -- 28,566 -- 28,566
Other current assets............. 21,450 13,282 34,732 (5,000)(2) 29,732
-------- --------- ---------- --------- ----------
Total current assets.......... 511,213 88,327 599,540 (5,000) 594,540
Long-term cash investments......... 49,796 7,265 57,061 -- 57,061
Restricted long-term investments in
marketable securities............ -- 7,000 7,000 -- 7,000
Property, equipment and
improvements, net................ 57,206 26,266 83,472 (5,900)(2) 77,572
Deferred income taxes.............. 19,020 2,199 21,219 -- 21,219
Capitalized software, net.......... 35,216 -- 35,216 -- 35,216
Goodwill and other purchased
intangibles, net................. 143,399 178,412 321,811 (178,412)(3) 437,847
314,041(2)
(18,500)(7)
(1,093)(5)
Other assets....................... 39,238 6,667 45,905 -- 45,905
-------- --------- ---------- --------- ----------
Total assets..................... 855,088 316,136 1,171,224 105,136 1,276,360
======== ========= ========== ========= ==========
Current liabilities:
Accounts payable................. $ 18,277 $ 6,902 $ 25,179 -- $ 25,179
Accrued compensation and related
expenses...................... 39,412 8,076 47,488 -- 47,488
Accrued income taxes............. 40,736 -- 40,736 -- 40,736
Other accrued liabilities........ 82,207 10,587 92,794 $ 61,100(2) 158,894
5,000(1)
Deferred revenue................. 210,739 18,571 229,310 (4,000)(2) 225,310
-------- --------- ---------- --------- ----------
Total current liabilities..... 391,371 44,136 435,507 62,100 497,607
Other liabilities.................. 5,781 302 6,083 -- 6,083
Minority interest.................. 1,873 -- 1,873 -- 1,873
Stockholders' equity:
Preferred stock.................. -- -- -- -- --
Common stock..................... 91 4 95 (4)(6) 107
16(1)
Additional paid-in capital....... 582,972 434,279 1,017,251 (434,279)(6) 917,283
334,311(1)
Accumulated earnings (deficit)... 949 (152,337) (151,388) 152,337(6) (17,551)
(18,500)(7)
Accumulated other comprehensive
loss.......................... (31,055) (6,459) (37,514) 6,459(6) (31,055)
Deferred stock-based
compensation.................. -- (1,239) (1,239) 1,239(6) (1,093)
(1,093)(5)
Cost of treasury stock........... (96,894) (2,550) (99,444) 2,550(6) (96,894)
-------- --------- ---------- --------- ----------
Total stockholders' equity.... 456,063 271,698 727,761 43,036 770,797
-------- --------- ---------- --------- ----------
Total liabilities and
stockholders' equity........ $855,088 $ 316,136 $1,171,224 $ 105,136 $1,276,360
======== ========= ========== ========= ==========
See accompanying notes to unaudited pro forma combined condensed financial
statements.
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SYBASE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2001
(IN THOUSANDS, EXCEPT PER SHARE DATA)
PRO FORMA PRO FORMA
SYBASE NEON COMBINED ADJUSTMENTS COMBINED
--------- --------- -------- ----------- ---------
Revenues:
License fees....................... $ 98,792 $ 22,818 $121,610 $ -- $121,610
Services........................... 130,280 20,417 150,697 -- 150,697
-------- -------- -------- -------- --------
Total revenues.................. 229,072 43,235 272,307 -- 272,307
Cost and expenses:
Cost of license fees............... 8,593 1,168 9,761 2,981(4) 12,742
Cost of services................... 61,717 11,674 73,391 -- 73,391
Product development and
engineering..................... 29,468 10,790 40,258 -- 40,258
Sales and marketing................ 85,149 17,983 103,132 -- 103,132
General and administrative......... 17,528 5,291 22,819 -- 22,819
Stock-based compensation........... -- 108 108 73(5) 181
Amortization of goodwill and other
purchased intangibles........... 7,173 16,496 23,669 (16,496)(3) 14,978
7,805(4)
Asset impairment charges........... -- 3,916 3,916 -- 3,916
-------- -------- -------- -------- --------
Total costs and expenses............. 209,628 67,426 277,054 (5,637) 271,417
Operating income (loss).............. 19,444 (24,191) (4,747) 5,637 890
Interest income...................... 4,503 840 5,343 -- 5,343
Interest expense and other, net...... (275) (57) (332) -- (332)
Minority interest.................... (8) -- (8) -- (8)
-------- -------- -------- -------- --------
Income (loss) before income taxes.... 23,664 (23,408) 256 5,637 5,893
Provision for income taxes........... 8,756 241 8,997 -- 8,997
-------- -------- -------- -------- --------
Net income (loss).................. $ 14,908 $(23,649) $ (8,741) $ 5,637 $ (3,104)
======== ======== ======== ======== ========
Pro forma net income(loss) per
share -- Basic(8)............... $ 0.17 $ (0.64) $ (0.03)
Pro forma net income(loss) per
share -- Diluted(8)............. $ 0.16 $ (0.64) $ (0.03)
Number of shares used in pro forma
per share
calculation -- basic(8)......... 87,350 36,769 14,350 101,700
Number of shares used in pro forma
per share
calculation -- diluted(8)....... 90,667 36,769 14,350 101,700
See accompanying notes to unaudited pro forma combined condensed financial
statements.
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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS
The unaudited pro forma combined condensed consolidated balance sheet has
been prepared to reflect the acquisition of NEON by Sybase as if the acquisition
had occurred on March 31, 2001, the date of the pro forma balance sheet. The
unaudited pro forma combined condensed consolidated statement of operations for
the three months ended March 31, 2001 has been prepared to reflect the
acquisition of NEON by Sybase as if the acquisition had occurred on January 1,
2001. Sybase will account for the acquisition of NEON as a purchase business
combination. The pro forma combined consolidated statement of operations for the
three months ended March 31, 2001 reflects the combination of the separate
historical statement of operations of NEON and Sybase. The pro forma combined
balance sheet reflects the combination of the separate historical balance sheets
of NEON and Sybase as of March 31, 2001.
The total estimated purchase price of the acquisition has been allocated on
a preliminary basis to assets and liabilities based on management's
determination of their fair values. The excess of the estimated purchase price
over the fair value of the net tangible assets acquired is approximately $314.0
million. The preliminary allocation has resulted in a charge for purchased
in-process research and development estimated to be $18.5 million, estimated
developed technology of $47.7 million, estimated assembled workforce of $9.0
million, estimated stock based compensation of $1.1 million and estimated
goodwill of $237.7 million. This allocation is subject to change pending
completion of the final analysis of the fair value of the assets acquired and
liabilities assumed, and the completion of work performed by an independent
third party appraiser. It is estimated that the developed technology, assembled
workforce, and goodwill will be amortized on a straight-line basis over periods
of 4, 6 and 8 years, respectively. The stock based compensation which relates to
the intrinsic value of the unvested options assumed, will be amortized over a
period of approximately 3.75 years. The in-process research and development will
be written off as a non-recurring charge, and is excluded from the pro forma
statement of operations.
Pro forma adjustments for the unaudited pro forma combined condensed
balance sheet as of March 31, 2001 and statements of operation for the three
months ended March 31, 2001 are as follows:
(1) To reflect the acquisition of all of the outstanding capital stock of NEON
for a total estimated purchase price of approximately $339.3 million. The
purchase consideration consists of the following:
(a) Issuance of approximately 14.3 million shares of Sybase common stock
with a fair value of approximately $318.0 million. The fair value per
share of common stock issued is based on the average of the closing
prices on the two days prior to and after the acquisition agreement
announcement, February 16, February 20, February 21 and February 22,
2001, respectively.
(b) Assumption of options to purchase approximately 3.0 million shares of
Sybase common stock with a fair value of approximately $16.3 million.
The fair value of the options assumed was determined based on the
Black-Scholes model. Assumptions used in determining the fair value of
the options assumed under the Black-Scholes model are as follows:
- Fair market value of the underlying shares is based on the average
closing price of Sybase shares for February 16, February 20, February
21, and February 22.
- Expected life -- .25 to 3.5 years
- Expected volatility -- .7093
- Risk-free interest rate -- 6.18%
- Expected dividend rate -- 0%
(c) Merger related costs of approximately $5.0 million consisting
primarily of Sybase's fees for investment bankers, attorneys,
accountants, filing and financial printing.
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(2) The preliminary allocation of the purchase price over the fair value of net
tangible assets acquired, using an assumed March 31, 2001 closing date for
purposes of determining net tangible assets has been determined as follows
(in millions):
Total purchase price........................................ $339.3
Less: Fair value of identifiable net tangible assets
acquired.................................................. $ 93.3
Add: Pro forma merger related adjustments................... $ 68.0
Excess of purchase price over fair value of identifiable net
tangible assets........................................... $314.0
The above represents the allocation of the purchase price over the
estimated fair value of NEON's net tangible assets at March 31, 2001,
adjusted as follows for estimated impaired assets, restructuring costs and
other merger related adjustments (in millions).
Litigation accruals......................................... $ 40.0
Inventory write off......................................... $ 5.0
Property, equipment and improvements write off.............. $ 5.9
Severance costs............................................. $ 4.9
Facilities costs............................................ $ 5.2
NEON operating loss from April 1 to April 11, 2001.......... $ 5.0
Other merger related costs and adjustments.................. $ 2.0
------
$ 68.0
The litigation accruals include a $39.0 million jury verdict judgement
against NEON awarded in June 2001 related to a litigation matter existing
prior to the acquisition date.
Other merger related costs include NEON merger related liabilities,
partially offset by the adjustment to reduce certain NEON deferred
revenues to cost plus a reasonable margin.
(3) To reflect the elimination of NEON's amortization charges related to
historical acquisitions and purchase of technology.
(4) To reflect the amortization of goodwill, developed technology, and
assembled workforce acquired in connection with the NEON acquisition. These
intangibles are being preliminarily amortized on a straight-line basis over
periods of 8, 4 and 6 years, respectively. The allocation between the
various intangible assets acquired, and the amortization period of these
intangible assets is subject to change pending finalization of the
evaluation currently being performed by an independent third party.
(5) To reflect the amortization of deferred stock compensation relating to the
unvested options assumed. The options which have been preliminarily valued
at $1.1 million will be amortized to stock compensation expense over the
options' remaining vesting period of approximately 3.75 years.
(6) To reflect the elimination of NEON's historical stockholders' equity
accounts.
(7) To reflect the write-off of in-process research and development which is
excluded from the statement of operations as a non-recurring charge.
(8) Pro forma net income (loss) per share reflects the impact of the
adjustments above. Pro forma basic net income (loss) per share is computed
using the weighted average number of shares of common stock outstanding
after the issuance of Sybase common stock to acquire the outstanding shares
of NEON. Pro forma diluted net income (loss) per share is computed as
described above and also gives effect to any dilutive options. Stock
options are excluded from the calculation during loss periods as their
effect is antidilutive.
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