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): June 30, 1998
COGNIZANT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-12275 06-1450569
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
200 Nyala Farms
Westport, Connecticut 06880
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (203) 222-4200
ITEM 5. Other Events
On January 15, 1998, the Board of Directors of the Registrant approved
in principle a plan to distribute to the holders of common stock of the
Registrant (the "Distribution") all of the common stock of the Registrant's
subsidiary, IMS Health Incorporated ("IMS HEALTH"). On June 15, 1998, the
Registrant's Board of Directors formally approved the Distribution and
declared a dividend payable to each holder of record of the Registrant's
common stock at the close of business on June 25, 1998 (the "Record Date") of
one share of IMS HEALTH common stock for each share of the Registrant's
common stock held by such holder at the close of business on the Record Date.
Prior to the Distribution, the Registrant will have contributed to IMS
HEALTH all or substantially all of the businesses which will comprise the IMS
HEALTH business, which accounted for approximately 75% of the Registrant's
revenues and 68% of the Registrant's operating income in 1997. Certificates
representing shares of IMS HEALTH common stock will be mailed to stockholders
of the Registrant on or about June 30, 1998. The Registrant has received a
ruling from the Internal Revenue Service to the effect that the Distribution
will be tax-free to the Registrant and its stockholders.
As a result of the Distribution, the Registrant will be separated into
two independent publicly traded companies: (i) IMS HEALTH, the leading global
provider of information solutions to the pharmaceutical and healthcare
industries and (ii) Nielsen Media Research, Inc., the leader in television
audience measurement services in North America.
IMS HEALTH is a newly created Delaware corporation, the businesses of
which will focus on information solutions to the pharmaceutical and
healthcare industries. Covering over 90 countries with over 7,200 employees
worldwide, IMS HEALTH's businesses will include those of I.M.S.
International, Inc., the leading global supplier of market information and
decision-support services to the pharmaceutical and healthcare industries;
Erisco, Inc., a leading supplier of software-based administrative and
analytical solutions to the managed care industry; Cognizant Enterprises,
Inc., a venture capital unit focused on investments in emerging healthcare
businesses; Cognizant Technology Solutions Corporation, a provider of
software application development and maintenance services and Year 2000 and
Eurocurrency compliance services; SSJ K.K., an entity based in Japan which
markets financial application software products and services tailored for the
Japanese market; and an equity investment in Gartner Group, Inc., the leading
supplier of research and analysis to the information technology industry.
Shares of IMS HEALTH Common Stock have been accepted for listing on the New
York Stock Exchange, Inc. (the "NYSE") under the symbol "RX".
Nielsen Media Research, Inc., currently a subsidiary of the Registrant,
is the leading source of television audience measurement services in North
America. As a result of the Distribution, the Nielsen Media Research business
will remain with the Registrant, and at the time of the Distribution, the
Registrant will change its name to Nielsen Media Research, Inc. The
Registrant's common stock will continue to trade on the NYSE after the
Distribution, but the symbol under which it trades will change from "CZT" to
"NMR".
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After the Distribution, the Registrant will not have any ownership
interest in IMS HEALTH, and IMS HEALTH will be an independent public company.
In addition, after the Distribution, IMS HEALTH will not have any ownership
interest in the Registrant (other than 800,000 shares of common stock of the
Registrant which IMS HEALTH has agreed to sell promptly after the
Distribution).
IMS HEALTH and the Registrant will enter into certain agreements
governing the relationship between IMS HEALTH and the Registrant subsequent
to the Distribution and providing for the allocation of tax, employee
benefits and certain other assets and liabilities and obligations arising
from periods prior to the Distribution, including contingent liabilities
relating to certain litigation. Forms of such agreements are filed as
Exhibits 99.2 to 99.5 to this Form 8-K and are incorporated herein by
reference. In addition, Mr. Robert E. Weissman and Mr. M. Bernard Puckett
will serve on the boards of directors of both companies after the
Distribution.
In connection with the Distribution, the Registrant has borrowed $300
million, the proceeds of which will be used to repay existing intercompany
indebtedness to certain entities included in IMS HEALTH. This debt will be
an obligation of the Registrant after the Distribution. IMS HEALTH will
retain $100 million in pre-existing minority-interest financing.
Attached hereto as Exhibit 99.1 is the Information Statement dated as of
June 22, 1998 (the "Information Statement") which the Registrant has sent to
each of the record holders of its common stock as of the close of business on
the Record Date. The Information Statement contains additional information
regarding the Distribution and the Registrant. All of the information
included in the following sections of the Information Statement is
incorporated herein by reference:
Questions and Answers About the Distribution and Related Matters
Information Statement Summary
Forward-Looking Statements
Risk Factors--Risks Relating to IMS HEALTH and Nielsen Media Research and
--Risks Relating to Nielsen Media Research
The Distribution
Relationship Between IMS HEALTH and Nielsen Media Research After the
Distribution
Dividend Policies--Nielsen Media Research
Nielsen Media Research Capitalization
Nielsen Media Research Selected Financial Data
Nielsen Media Research Management's Discussion and Analysis of Financial
Condition and Results of Operations
Nielsen Media Research Business
Nielsen Media Research Management and Executive Compensation
Nielsen Media Research Security Ownership By Certain Beneficial Owners and
Management
Financial Statements--Nielsen Media Research, Inc. (Pages F-39 to F-59
inclusive)
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ITEM 7. Financial Statements; Pro Forma Financial Statements and Exhibits
(b) Pro Forma Financial Information
The information included in the section of the Information Statement
entitled "Nielsen Media Research Unaudited Consolidated Pro Forma Financial
Statements" is incorporated herein by reference. Readers should note that
notwithstanding the legal form of the Distribution described above, whereby
the Registrant will "spin-off" IMS HEALTH, because of the relative
significance of the IMS HEALTH business to the Registrant, IMS HEALTH will
be treated as the "accounting successor" to the Registrant for financial
reporting purposes. The pro forma financial statements incorporated by
reference herein relate to the ongoing operations of the Registrant after
the Distribution.
(c) Exhibits
Exhibit No. Description
- ----------- -----------
23 Consent of Independent Accountants
27 Financial Data Schedule
99.1 Information Statement dated as of June 22, 1998
99.2 Form of Distribution Agreement between Cognizant Corporation and
IMS Health Incorporated
99.3 Form of Tax Allocation Agreement between Cognizant Corporation
and IMS Health Incorporated
99.4 Form of Employee Benefits Agreement between Cognizant
Corporation and IMS Health Incorporated
99.5 Form of Amended and Restated Transition Services Agreement among
Cognizant Corporation, IMS Health Incorporated, The Dun &
Bradstreet Corporation, The New Dun & Bradstreet Corporation,
ACNielsen Corporation and Gartner Group, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
COGNIZANT CORPORATION
By: /s/ Kenneth Siegel
------------------------------
Title: Senior Vice President
Date: June 30, 1998
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
23 Consent of Independent Accountants
27 Financial Data Schedule
99.1 Information Statement dated as of June 22, 1998
99.2 Form of Distribution Agreement between Cognizant Corporation and
IMS Health Incorporated
99.3 Form of Tax Allocation Agreement between Cognizant Corporation
and IMS Health Incorporated
99.4 Form of Employee Benefits Agreement between Cognizant
Corporation and IMS Health Incorporated
99.5 Form of Amended and Restated Transition Services Agreement among
Cognizant Corporation, IMS Health Incorporated, The Dun &
Bradstreet Corporation, The New Dun & Bradstreet Corporation,
ACNielsen Corporation and Gartner Group, Inc.