UNITED STATES
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): December 2, 1998
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Euronet Services Inc.
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(Exact name of registrant as specified in its charter)
Delaware 04-2806888
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) ID NUMBER)
Horvat u. 14-24 1027 Budapest, Hungary N/A
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 011-361-224-1000
N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 2, 1998, Euronet Services, Inc. (the "Company") completed the
acquisition of Arkansas Systems Inc., an Arkansas corporation ("Arksys") through
the merger of AE Merger Corp., an Arkansas corporation and a wholly owned
subsidiary of the Company ("Merger Sub"), with and into Arksys (the "Merger")
with Arksys remaining as the surviving corporation. Immediately prior to the
effective time of the Merger, the real estate holdings of Arksys were sold,
transferred and assigned to various Arksys shareholders in exchange for the
redemption by Arksys of a portion of the Arksys common stock held by such
shareholders. Accordingly, Arksys's real estate holdings were not included in
the acquisition.
The Merger was consummated pursuant to terms and conditions of an Agreement
and Plan of Merger entered into between the Company, Merger Sub, Arksys and
certain shareholders of Arksys (the "Merger Agreement"). Upon the effective
time of the Merger, the Company purchased all of the issued and outstanding
capital stock of Arksys for a purchase price of $18.2 million of which $ 6
million are being held in escrow to provide for the payment of damages
attributable to any breach of the representations and warranties contained in
the Merger Agreement and certain post-closing payments set forth in the Merger
Agreement. In addition, as a result of the Merger, each option to purchase
shares of the common stock of Arksys held by optionholders with less than 1000
unvested options was cancelled and replaced by an option to purchase the same
number of shares of the Company's common stock as the number of Arksys's shares
that were subject to such option immediately prior to the Merger. Following the
acquisition, Arksys became a wholly owned subsidiary of the Company.
Euronet operates the only independent, non-bank owned ATM network in
Central Europe. Through agreements with local banks and international card
issuers such as Visa, MasterCard, Europay, American Express and Diners Club
International, Euronet's ATMs are able to process ATM transactions for holders
of credit and debit cards issued by or bearing logos of such banks and card
issuing organizations. Arksys, which is based in Little Rock, Arkansas, produces
computer software for comprehensive electronic payment and transaction delivery
systems. Arkysys's products and services include comprehensive ATM, POS, debt
and smart card packages, EFT network solutions, interactive voice response,
international credit card systems and Internet and intranet cash management,
home banking, bill payment and presentment offerings. Arksys is also the
primary supplier of ATM network software for the IBM AS/400 platform. Prior to
the Merger, Arksys was a key software provider to Euronet's ATM transactions
processing center in Central Europe. The Company plans to continue Arksys's
business and operations.
The foregoing summary is qualified in its entirety by reference to the copy
of the Merger Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Unaudited consolidated balance sheets for the acquired business as of
September 30, 1998 and December 31, 1997 and the related unaudited consolidated
statements of operations and comprehensive income (loss), shareholders' equity
and cash flows for the nine month period ended September 30, 1998 and for the
year ended December 31, 1997 have been provided. These financial statements
represent the business as carried out by the selling shareholders and, as such,
certain aspects of the acquired business which will change as a result of the
acquisition have not been reflected therein. Such adjustments will be presented
with the Pro Forma Financial Information. The required financial information for
the business acquired will be filed under cover of Form 8-K/A within 60 days of
the date this Form 8-K was required to be filed.
(b) Pro Forma Financial Information
The required audited pro forma financial information will be filed under
cover of Form 8-K/A within 60 days of the date this Form 8-K was required to be
filed.
C. Exhibits
Exhibit 2.1 - Agreement of Merger dated as of November 3, 1998, by and among
Euronet Services, Inc., AE Merger Corp., Arkansas Systems Inc.
and certain shareholders of Arkansas Systems, Inc. (previously
filed as Item 6 Exhibit 10 to Form 10Q filed with the
Commission on November 14, 1998.)
Exhibit 2.2 - Escrow Agreement dated as of December 2, 1998 by and among
Euronet Services, Inc., John Chamberlin, James Hendren, Donald
B. Hatfield, Eugene Jones, David Payne and Mercantile Trust
Company, N.A.
Exhibit 99 - Unaudited Consolidated Financial Statements for ARKSYS for
period January 1, 1998 to September 30, 1998.
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.
Euronet Services Inc.
By: /s/ Daniel R. Henry
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Daniel R. Henry
Chief Operating Officer
Date: December 16, 1998
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