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UNITED STATES
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 (Date of Earliest Event Reported): September 30, 1998
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COMPASS INTERNATIONAL SERVICES CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Delaware 000-23217 22-3540815
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(State or Other Jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.
One Penn Plaza, Suite 4430, New York, New York 10119
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 967-7770
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to a Stock Purchase Agreement, dated as of September 30, 1998
(the "Purchase Agreement"), Compass Receivables Management Corporation ("CRMC"),
a Delaware corporation and a wholly-owned subsidiary of the Registrant, acquired
all of the outstanding common stock of Professional American Collections, Inc.,
an Illinois corporation ("PAC"), from trusts (the "Selling Stockholders")
established by Messrs. Steven McCormick, David McCormick and Mark McCormick (the
"Principals"). In consideration for the shares of PAC, the Selling Stockholders
received $10,425,000 in cash, 659,154 unregistered shares of common stock of the
Registrant and notes of the Registrant in the aggregate principal amount of
$5,850,000. CRMC also agreed to contribute $1,275,000 to PAC in respect of a
bonus paid by PAC to Mr. John McCormick. The Purchase Agreement provides that
contingent consideration, in the form of unregistered shares of common stock of
the Registrant, may be payable by the Registrant in calendar 1999 and 2000 based
on PAC attaining certain earnings levels during calendar 1998 and 1999. The
purchase price agreed upon by the Registrant and Principals was the result of
arms-length negotiations. The cash paid pursuant to the Purchase Agreement was
borrowed under the Registrant's existing revolving credit facility.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a) Financial Statements.
As of the date of filing of this Current Report on Form 8-K,
it is impracticable for the Registrant to provide the
financial statements required by this Item 7(a). In accordance
with Item 7(a)(4) of Form 8-K, such financial statements shall
be filed by amendment as soon as practicable and in no event
later than 60 days after the filing date of this Report on
Form 8-K.
b) Pro Forma Financial Information.
As of the date of filing of this Current Report on Form 8-K,
it is impracticable for the Registrant to provide the pro
forma financial statements required by this Item 7(b). In
accordance with Item 7(b)(2) of Form 8-K, such pro forma
financial statements shall be filed by amendment as soon as
practicable and in no event later than 60 days after the
filing date of this Report on Form 8-K.
c) Exhibits.
2.1 Stock Purchase Agreement dated as of September 30,
1998, among the Registrant, Compass Receivables
Management Corporation and the Principals named
therein. Registrant agrees to furnish supplementally
to the Commission, upon request, a copy of any
omitted schedule.
4.1 Promissory Note, dated September 30, 1998, issued by
the Registrant to the Steven B. McCormick Trust in
the principal amount of $1,950,000.
4.2 Promissory Note, dated September 30, 1998, issued by
the Registrant to the David P. McCormick Trust in
the principal amount of $1,950,000.
4.3 Promissory Note, dated September 30, 1998, issued by
the Registrant to the Mark E. McCormick Trust in the
principal amount of $1,950,000.
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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.
COMPASS INTERNATIONAL SERVICES
CORPORATION
Dated: October 15, 1998 By: /s/ MICHAEL J. CUNNINGHAM
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Michael J. Cunningham
Chief Executive Officer
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Exhibit Index
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Sequentially
Numbered
Exhibit # Item Pages
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2.1 Stock Purchase Agreement dated as of September 30,
1998, among the Registrant, Compass Receivables
Management Corporation and the Principals named
therein. Registrant agrees to furnish supplementally to
the Commission, upon request, a copy of any omitted
schedule.
4.1 Promissory Note, dated September 30, 1998, issued by
the Registrant to the Steven B. McCormick Trust in
the principal amount of $1,950,000.
4.2 Promissory Note, dated September 30, 1998, issued by
the Registrant to the David P. McCormick Trust in
the principal amount of $1,950,000.
4.3 Promissory Note, dated September 30, 1998, issued by
the Registrant to the Mark E. McCormick Trust in the
principal amount of $1,950,000.
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