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): October 20, 1997
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
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(Exact name of issuer as specified in charter)
Delaware 0-29-092 54-1708481
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
2070 Chain Bridge Road
Suite 425
Vienna, Virginia 22182
(Address of principal executive offices)
(703) 902-2800
(Registrant's telephone number, including area code)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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On October 20, 1997 ("Closing Date"), Primus Telecommunications, Inc.,
a Delaware corporation ("PTI") and wholly-owned subsidiary of Primus
Telecommunications Group, Incorporated (the "Company"), purchased substantially
all of the assets and assumed certain obligations of USFI, Inc., a New York
corporation ("USFI"), in an asset purchase transaction (the "Asset Purchase")
pursuant to an Asset Purchase Agreement dated as of the Closing Date (the "Asset
Agreement") by and among PTI, USFI and the Company. In addition, U.S. Cable
Corporation, a New Jersey corporation affiliated with USFI, executed the Asset
Agreement only with respect to its agreement to provide conditional and limited
indemnification support to PTI in the event any creditors of USFI assert a claim
against PTI. The total consideration paid pursuant to the Asset Agreement was
negotiated at arms-length and valued at $5,500,000, in addition to the
assumption by PTI of certain liabilities of USFI (the "Asset Purchase
Price"). $500,000 of the Asset Purchase Price is held in escrow and will remain
available for six months from the Closing Date (unless distributed before that
time in accordance with the terms of the escrow agreement) to secure
indemnification obligations to PTI, all as more fully set forth in the Asset
Agreement. PTI used internal funds to pay the Asset Purchase Price and expenses
related to the Asset Purchase. In addition to assuming certain liabilities of
USFI, PTI acquired substantially all the assets of USFI, including equipment,
inventory, tangible personal property, intellectual property, rights with
respect to certain carrier and provider contracts and agreements with
independent representatives and agents, USFI's customer base, switching
facilities and billing and back office support systems and other intangibles. It
is the Company's intention to cause PTI to use these assets to continue the
businesses described below. The Company guaranteed the payment obligations of
PTI under the Asset Agreement.
Concurrent with PTI's execution of the Asset Agreement, Primus
Telecommunications International, Inc., a Delaware corporation ("PTII") and
wholly-owned subsidiary of the Company, purchased all of the equity and
ownership interests in TelePassport L.L.C., a Delaware limited liability company
("TelePassport"), in an equity purchase transaction (the "Equity Purchase")
pursuant to an Equity Purchase Agreement also dated as of the Closing Date (the
"Equity Agreement") by and among Messrs.
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James D. Pearson, Stephen E. Myers, and Michael C. Anderson (collectively, the
"Sellers"), who collectively held all of the equity and ownership interests in
TelePassport (the "Membership Interests"), PTII and the Company. The total
consideration paid for the Membership Interests pursuant to the Equity Agreement
was negotiated at arms-length and valued at $6,000,000 (the "Equity Purchase
Price"). The Equity Purchase Price may be adjusted depending on the final
balance sheet for TelePassport, calculated as of the Closing Date, which is to
be prepared and delivered to Sellers no later than 135 days after the Closing
Date. $700,000 of the Equity Purchase Price is held in escrow and will remain
available for six months from the Closing Date (unless distributed before that
time in accordance with the terms of the escrow agreement) to secure certain
indemnification obligations to PTII and to cover the purchase price adjustment
provisions, as more fully set forth in the Equity Agreement. PTII used internal
funds to pay the Equity Purchase Price and expenses related to the Equity
Purchase. The Company guaranteed the payment obligations of PTII under the
Equity Agreement.
Prior to the consummation of the Asset Purchase and Equity Purchase,
USFI and TelePassport were under common control. USFI, headquartered in New York
City with offices and switching facilities in New York City and Piscataway, New
Jersey, and TelePassport, with offices in Tokyo, Japan, were engaged in the
business of providing international and domestic telecommunications services,
including long distance and call reorigination services in Europe, Asia and
South Africa to approximately 15,000 business and residential customers located
primarily in Germany, Japan, Austria, Switzerland and South Africa.
ITEM 7. FINANCIAL STATEMENTS; PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
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(a)(1) Financial Statements of Businesses Acquired.
It is impracticable to provide the financial statements required
relative to the acquired businesses described
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in Item 2 at the time this Report on Form 8-K is filed. The Registrant
will file the required financial statements as soon as practicable,
but in no event later than January 3, 1998.
(b) Pro Forma Financial Information.
It is impracticable to provide the pro forma information required
relative to the acquired businesses described in Item 2 at the time
this Report on Form 8-K is filed. The Registrant will file pro forma
financial information as soon as practicable, but in no event later
than January 3, 1998.
(c) Exhibits
2.1 Asset Purchase Agreement by and among USFI, Inc., Primus
Telecommunications, Inc., Primus Telecommunications Group,
Incorporated and U.S. Cable Corporation, dated as of October 20, 1997.
2.2 Equity Purchase Agreement by and among Messrs. James D. Pearson,
Stephen E. Myers, Michael C. Anderson, Primus Telecommunications
International, Inc., and Primus Telecommunications Group, Incorporated
dated as of October 20, 1997.
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SIGNATURE
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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.
PRIMUS TELECOMMUNICATIONS GROUP,
INCORPORATED
Date: November 3, 1997 By: /s/ Neil L. Hazard
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Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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2.1 Asset Purchase Agreement by and among USFI, Inc., Primus
Telecommunications, Inc., Primus Telecommunications Group,
Incorporated and U.S. Cable Corporation, dated as of October 20, 1997.
(The exhibits and schedules listed in the table of contents to the
Asset Purchase Agreement have been omitted in accordance with Item
601(b)(2) of Regulation S-K. A copy of such exhibits and schedules
shall be furnished supplementally to the Securities and Exchange
Commission upon request.)
2.2 Equity Purchase Agreement by and among Messrs. James D. Pearson,
Stephen E. Myers, Michael C. Anderson, Primus Telecommunications
International, Inc., and Primus Telecommunications Group, Incorporated
dated as of October 20, 1997. (The exhibits and schedules listed in
the table of contents to Equity Purchase Agreement have been omitted
in accordance with Item 601(b)(2) of Regulation S-K. A copy of such
exhibits and schedules shall be furnished supplementally to the
Securities and Exchange Commission upon request.)