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 earliest event reported: MAY 14, 1998
OUTSOURCE INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
FLORIDA 000-23147 65-0675628
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
1144 EAST NEWPORT CENTER DRIVE,
DEERFIELD BEACH, FLORIDA 33442
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (954) 418-6200
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
a) May 14, 1998, OutSource International of America, Inc. ("OSIA"), a
wholly owned subsidiary of the Registrant, purchased substantially all of the
tangible and intangible assets, excluding accounts receivable, of MidWest Temps,
Inc., an Illinois corporation ("MidWest"), pursuant to the terms of an Asset
Purchase Agreement dated May 14, 1998. The initial purchase price for the assets
was $4.95 million, of which $4.0 million was paid in cash at closing and $0.95
million was placed in escrow. The escrowed portion is payable to MidWest
approximately fourteen months after closing, less any portion payable to OSIA as
compensation for any losses resulting from any breach of the Asset Purchase
Agreement, including warranties and representations, by MidWest. OSIA is
obligated to pay MidWest an additional amount equivalent to any increase in the
amount of gross profit of the acquired locations for the twelve months ended May
31, 1999, as compared to the greater of a contractually defined amount or the
gross profit of those locations for the twelve months ended March 31, 1998. In
connection with the acquisition, OSIA entered into five-year non-competition
agreements with MidWest and Teresa Usher and Deborah Weiss, stockholders of
MidWest.
The purchase price was arrived at through arms-length negotiations
between the parties. The cash and escrowed portions of the purchase price were
funded from the Registrant's revolving credit agreement with Bank Boston, N.A.,
as agent for a syndicate of lenders.
MidWest is a temporary industrial staffing firm with two business
locations in the Chicago, Illinois metropolitan area and estimated 1997 revenues
of $6.7 million.
The Registrant currently intends to continue to operate the business
formerly conducted by MidWest at both of the purchased locations with the
purchased assets for the foreseeable future. The foregoing statement of the
Registrant's intention is a forward looking statement within the meaning of
Section 21E of the Securities Exchange Act of 1934, and is based on certain
assumptions, including among others, general economic conditions, management's
expectations regarding the operating results of the Registrant and the purchased
locations, the capital requirements of continuing MidWest's current business and
others. Should these assumptions change, or prove to be inaccurate, the
Registrant's actual future conduct of MidWest's business could differ materially
from the intention stated.
The above descriptions of the asset purchase agreement and the
non-competition agreements do not purport to be complete and are qualified in
their entirety by the full text of such documents which are attached as Exhibits
hereto.
b) On May 15, 1998, OSIA purchased substantially all of the tangible and
intangible assets, excluding accounts receivable, of Resource Dimensions, Inc.,
an Illinois corporation ("RDI"), pursuant to the terms of an Asset Purchase
Agreement dated May 15, 1998. The purchase price for the assets was $3.7
million, which included $1.75 million paid in cash at closing and the delivery
of a $1.75 million junior subordinated promissory note, which is payable in
three installments during a nineteen and one half month period after closing
plus interest at an annual rate of six percent. Payment of the remaining
$200,000 is primarily contingent upon the amount of gross profit of the acquired
location for the twelve months following the acquisition. In connection with the
acquisition, OSIA entered into five-year non-competition agreements with RDI,
Earl Pick, the President and majority stockholder of RDI, and RDI's minority
shareholders.
The purchase price was arrived at through arms-length negotiations
between the parties. The cash portion of the purchase price was funded from the
Registrant's revolving credit agreement with Bank Boston, N.A., as agent for a
syndicate of lenders.
RDI is a temporary industrial staffing firm with one business location
in the Chicago, Illinois metropolitan area and estimated 1997 revenues of $9.2
million.
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The Registrant currently intends to continue to operate the business
formerly conducted by RDI at the purchased location with the purchased assets
for the foreseeable future. The foregoing statement of the Registrant's
intention is a forward looking statement within the meaning of Section 21E of
the Securities Exchange Act of 1934, and is based on certain assumptions,
including among others, general economic conditions, management's expectations
regarding the operating results of the Registrant and the purchased location,
the capital requirements of continuing RDI's current business and others. Should
these assumptions change, or prove to be inaccurate, the Registrant's actual
future conduct of RDI's business could differ materially from the intention
stated.
The above descriptions of the asset purchase agreement, the
non-competition agreements, and the promissory note do not purport to be
complete and are qualified in their entirety by the full text of such documents
which are attached as Exhibits hereto.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is not practicable to provide the financial statements required to
be filed as a result of the acquisitions of the assets of MidWest and RDI
described in Item 2 hereof (the "Financial Statements") on the date that this
report is being filed with the Securities and Exchange Commission. The Financial
Statements will be filed by amendment to this Form 8-K as soon as practicable,
but in any event not later than 60 days after this report is filed. The Company
expects to file the Financial Statements no later than July 28, 1998.
(b) PRO FORMA FINANCIAL INFORMATION.
It is not practicable to provide the pro forma financial information
required to be filed as a result of the acquisitions of the assets of MidWest
and RDI described in Item 2 hereof (the "Pro Forma Information"), on the date
that this report is being filed with the Securities and Exchange Commission. The
Pro Forma Information will be filed by amendment to this Form 8-K as soon as
practicable, but in any event not later than 60 days after this report is filed.
The Company expects to file the Pro Forma Information no later than July 28,
1998.
(c) EXHIBITS.
2.1 Asset Purchase Agreement, dated May 14, 1998, by and
among OutSource International of America, Inc.,
MidWest Temps, Inc., Teresa Usher and Deborah Weiss.
2.2 Asset Purchase Agreement, dated May 15, 1998, by and
among OutSource International of America, Inc.,
Resource Dimensions, Inc., and Earl M. Pick.
10.1 Non-Competition Agreement, dated May 18, 1998,
between OutSource International of America, Inc. and
Teresa Usher.
10.2 Non-Competition Agreement, dated May 18, 1998,
between OutSource International of America, Inc. and
Deborah Weiss.
10.3 Non-Competition Agreement, dated May 18, 1998,
between OutSource International of America, Inc. and
MidWest Temps, Inc.
10.4 Junior Subordinated Promissory Note, dated as of May
15, 1998, issued by OutSource International of
America, Inc. to Resource Dimensions, Inc.
10.5 Non-Competition Agreement, dated May 15, 1998,
between OutSource International of America, Inc. and
Earl M. Pick.
10.6 Non-Competition Agreement, dated May 15, 1998,
between OutSource International of America, Inc. and
Resource Dimensions, Inc.
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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 thereunto duly authorized.
OUTSOURCE INTERNATIONAL, INC.
By: /S/ PAUL M. BURRELL
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Paul M. Burrell
President
Dated: May 29, 1998
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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2.1 Asset Purchase Agreement, dated May 14, 1998, by and among
OutSource International of America, Inc., MidWest Temps, Inc.,
Teresa Usher and Deborah Weiss.
2.2 Asset Purchase Agreement, dated May 15, 1998, by and among
OutSource International of America, Inc., Resource Dimensions,
Inc., and Earl M. Pick.
10.1 Non-Competition Agreement, dated May 18, 1998, between
OutSource International of America, Inc. and Teresa Usher.
10.2 Non-Competition Agreement, dated May 18, 1998, between
OutSource International of America, Inc. and Deborah Weiss.
10.3 Non-Competition Agreement, dated May 18, 1998, between
OutSource International of America, Inc. and MidWest Temps,
Inc.
10.4 Junior Subordinated Promissory Note, dated as of May 15, 1998,
issued by OutSource International of America, Inc. to Resource
Dimensions, Inc.
10.5 Non-Competition Agreement, dated May 15, 1998, between
OutSource International of America, Inc. and Earl M. Pick.
10.6 Non-Competition Agreement, dated May 15, 1998, between
OutSource International of America, Inc. and Resource
Dimensions, Inc.
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