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) May 18, 1998
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InSight Health Services Corp.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 0-28622 33-0702770
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(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
4400 MacArthur Boulevard, Suite 800, Newport Beach, CA 92660
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(949) 476-0733
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On May 18, 1998, InSight Health Services Corp., a Delaware corporation
("Registrant"), through its wholly owned subsidiary, SMSI Acquisition
Company, a Delaware corporation ("SMSI"), acquired all of the capital
stock of Signal Medical Services, Inc., a Delaware corporation ("Signal"),
in a merger of Signal with and into SMSI (the "Merger"). The Merger was
consummated pursuant to an Agreement and Plan of Merger dated as of
April 15, 1998 among Registrant, SMSI, Signal, SMSI Holdings, Inc.
("Holdings"), Brian P. Stone, Thomas W. Crucitti and Todd Stowell, as
amended by the First Amendment thereto dated May 15, 1998 and the Second
Amendment thereto dated May 18, 1998. Holdings and Messrs. Stone, Crucitti
and Stowell were the stockholders of Signal (collectively, the "Signal
Stockholders"). The assets acquired by Registrant as a result of the Merger
consist of certain tangible and intangible assets, including mobile
diagnostic imaging equipment, customer contracts and other agreements
entered into in by Signal in connection with providing diagnostic imaging
services to customers in the Northeastern and Southeastern United States.
Pursuant to the Merger Agreement and the Certificate of Merger filed with
the Secretary of State of the State of Delaware, at the effective time of
the Merger, SMSI changed its name to "Signal Medical Services, Inc."
The aggregate purchase price, including the assumption of indebtedness,
was $45.7 million, and was determined by negotiations among the parties.
The purchase price was paid entirely in cash and is subject to
certain post-closing adjustments. A portion of the purchase price is
being held in escrow for a period of time after the Merger for the
satisfaction of certain indemnification obligations of the Signal
Stockholders. As a condition to the Merger, Messrs. Stone, Crucitti,
Stowell and David M. Karchner, all former officers and employees of Signal,
entered into employment agreements with Registrant pursuant to which such
individuals agreed to serve as employees of Registrant. In connection
with such employment agreements, Messrs. Stone, Crucitti and Karchner
received options to purchase a number of shares of common stock of
Registrant. Registrant utilized its existing credit facility with
NationsBank, N.A. to fund the purchase price.
(b) At the time of the Merger, Signal provided diagnostic imaging services,
including magnetic resonance imaging, computed tomography and lithotripsy
services, in eleven states, primarily in the Northeastern and Southeastern
United States. Registrant intends to use the assets acquired in the Merger
to expand upon its existing business. Registrant provides diagnostic
imaging and information, treatment and related management services to
managed care, hospitals and other contractual customers in 25 United
States, including five major U.S. markets.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired.
It is impractical to file with this report the financial statements
required by this Item. Audited financial statements of Signal Medical
Services, Inc. for the fiscal years ended December 31, 1996 and 1997
required by this Item will be included in an amendment to this report
to be filed within 60 days after the date this report is filed with
the Securities and Exchange Commission ("SEC").
(b) Pro forma financial information.
It is impractical to file with this report the pro forma financial
information required by this Item. Pro forma financial information
required by this Item will be included in an amendment to this report
to be filed within 60 days after the date this report is filed with
the SEC.
(c) Exhibits.
*2.1 Agreement and Plan of Merger dated as of April 15, 1998 among
InSight Health Services Corp., SMSI Acquisition Company, Signal
Medical Services, Inc., SMSI Holdings, Inc., Brian P. Stone,
Thomas W. Crucitti and Todd Stowell (incorporated herein by
reference to Exhibit 10.32 to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1998 filed with the
Commission on May 13, 1998).
2.2 First Amendment to Agreement and Plan of Merger dated as of May
15, 1998 by and among InSight Health Services Corp., SMSI
Acquisition Company, Signal Medical Services, Inc., SMSI
Holdings, Inc., Brian P. Stone, Thomas W. Crucitti and Todd
Stowell (filed herewith).
2.3 Second Amendment to Agreement and Plan of Merger dated as of May
18, 1998 by and among InSight Health Services Corp., SMSI
Acquisition Company, Signal Medical Services, Inc., SMSI
Holdings, Inc., Brian P. Stone, Thomas W. Crucitti and Todd
Stowell (filed herewith).
99.1 Press Release dated May 19, 1998 announcing the completion of the
Merger (filed herewith).
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* Previously filed.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 2, 1998
INSIGHT HEALTH SERVICES CORP.
BY: /S/ E. LARRY ATKINS
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E. Larry Atkins
President and Chief Executive Officer
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EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NO. DOCUMENT DESCRIPTION NUMBERED PAGE
*2.1 Agreement and Plan of Merger dated as of April 15,
1998 among InSight Health Services Corp., SMSI
Acquisition Company, Signal Medical Services, Inc.,
SMSI Holdings, Inc., Brian P. Stone, Thomas W.
Crucitti and Todd Stowell (incorporated herein by
reference to Exhibit 10.32 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 filed with the Commission on
May 13, 1998)
2.2 First Amendment to Agreement and Plan of Merger
dated as of May 15, 1998 by and among InSight
Health Services Corp., SMSI Acquisition Company,
Signal Medical Services, Inc., SMSI Holdings,
Inc., Brian P. Stone, Thomas W. Crucitti and Todd
Stowell (filed herewith) . . . . . . . . . . . . . 6
2.3 Second Amendment to Agreement and Plan of Merger
dated as of May 18, 1998 by and among InSight
Health Services Corp., SMSI Acquisition Company,
Signal Medical Services, Inc., SMSI Holdings,
Inc., Brian P. Stone, Thomas W. Crucitti and Todd
Stowell (filed herewith) . . . . . . . . . . . . . 8
99.1 Press Release dated May 19, 1998 announcing the
completion of the Merger (filed herewith). . . . . 10
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* Previously filed.