0000109758-95-000017.txt : 19950828 0000109758-95-000017.hdr.sgml : 19950828 ACCESSION NUMBER: 0000109758-95-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950824 ITEM INFORMATION: Changes in control of registrant FILED AS OF DATE: 19950825 SROS: CSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CERIDIAN CORP CENTRAL INDEX KEY: 0000109758 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER & OFFICE EQUIPMENT [3570] IRS NUMBER: 520278528 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01969 FILM NUMBER: 95566709 BUSINESS ADDRESS: STREET 1: 8100 34TH AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55425 BUSINESS PHONE: 6128538100 FORMER COMPANY: FORMER CONFORMED NAME: CONTROL DATA CORP /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCIAL CREDIT CO DATE OF NAME CHANGE: 19680910 8-K 1 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): August 24, 1995 CERIDIAN CORPORATION (Exact name of registrant as specified in its charter) Delaware 1-1969 52-0278528 (State of other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 8100 34th Avenue South, Minneapolis, Minnesota 55425 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (612-853-8100) (Former name or former address, if changed since last report) 2 Item 5. Other Events On August 24, 1995, Ceridian Corporation ("eridian") announced that it had entered into an Agreement and Plan of Merger dated as of August 23, 1995 (the "Merger Agreement") with Comdata Holdings Corporation ("Comdata") pursuant to which Comdata will become a wholly-owned subsidiary of Ceridian as the result of the merger of a newly created subsidiary of Ceridian into Comdata (the "Merger"). The Merger Agreement provides that as a result of the Merger, each outstanding share of common stock of Comdata will be converted into the right to receive shares of Ceridian common stock at an exchange ratio (the "Exchange Ratio") of .57 shares of Ceridian common stock for each share of Comdata common stock, and each share of Comdata's Series B and C preferred stock (other than shares, if any, as to which disssenters' rights of appraisal are validly exercised and not withdrawn) will be converted into the right to receive the number of shares of Ceridian common stock equal to the product of the Exchange Ratio and the number of shares of Comdata common stock into which such shares of Comdata preferred stock are convertible into Comdata common stock. It is expected that approximately 21.6 million shares of Ceridian common stock will be issued to effect the Merger, having a value of approximately $900 million based on the closing price of Ceridian's common stock on August 23, 1995. The Merger is intended to be tax free to Comdata's shareholders and to be accounted for as a "pooling of interests." Comdata provides financial transaction and information services to the transportation and gaming industries. Comdata serves the transportation industry by assisting trucking companies and truck stops with data- intensive operations such as cash advances to drivers, driver settlement, money transfer, load matching, route planning, fuel purchase, fuel tax reporting and permit delivery. Comdata serves the gaming industry by providing cash advance services to patrons at gaming locations nationwide. Comdata is headquartered in Brentwood, Tennessee, and its common stock trades on the NASDAQ National Market System under the symbol "CMDT." For the year ended December 31, 1994 and the six months ended June 30, 1995, Comdata reported the following: Year ended Six months ended December 31, 1994 June 30, 1995 ($ in millions) Revenue $243.3 $131.5 Earnings before interest and taxes 62.0 34.0 Interest expense 30.6 14.9 Net earnings 28.1 12.8 At June 30, 1995, Comdata reported total assets of $288.8 million, total liabilities of $364.6 million (including total debt of $226.5 million), and a total stockholders' deficit of $75.8 million. 3 The Merger is subject to the approval of the shareholders of Comdata and Ceridian, to certain other conditions, including no changes in reported ownership of Ceridian stock prior to or as result of the Merger that would affect the continuing full availability of Ceridian's net operating loss carryforwards, and to certain regulatory matters, including completion of the Hart-Scott-Rodino process. The Merger transaction is expected to be completed before the end of 1995. In connection with the Merger and during the fourth quarter 1995, Ceridian expects to refinance Comdata's outstanding indebtedness, consisting principally of 12.5% Senior Notes and 13.25% Senior Subordinated Debentures aggregating approximately $205 million. Charges that Ceridian expects to record in the fourth quarter 1995 to cover such refinancing and other Merger-related costs and expenses are expected to be approximately $65 million. Item 7. Financial Statements and Exhibits. c. Exhibits. Attached hereto. 99.1 Press Release, dated August 24, 1995. 4 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CERIDIAN CORPORATION Date: August 24, 1995 By: /s/Loren D. Groxx Loren D. Gross Vice President and Corporate Controller (Principal Accounting Officer) EXHIBIT INDEX Exhibit Description Code 99.1 Ceridian Corporation Press Release E Dated August 24, 1995 Legend: E Electronic Filing IBR Incorporated by Reference EX-99 2 EXHIBIT 99.1 5 EXHIBIT 99.1 News Release CERIDIAN CORPORATION Nancy Foltz Ceridian 612/853-5229 CERIDIAN TO ACQUIRE COMDATA HOLDINGS IN $900 MILLION STOCK TRANSACTION Acquisition Will Make Ceridian a $1.3 Billion Information Services Provider Transaction Expected to Be Accretive to Ceridian's EPS MINNEAPOLIS, MN./BRENTWOOD, TN., August 24, 1995 -- Ceridian Corporation (NYSE: CEN) and Comdata Holdings Corporation (NASDAQ: CMDT) jointly announced today that Ceridian has reached a definitive agreement to acquire Comdata, a leading provider of transaction processing and information services to the transportation and gaming industries. The Board of Directors of both companies have unanimously approved the acquisition. The combination creates a company that will have $1.3 billion of annual revenue, primarily from information services. The transaction is expected to be accretive to Ceridian's earnings per share in 1996, and to provide an increasingly positive contribution to earnings thereafter. Under the terms of the agreement, Comdata's common shareholders will receive 0.57 shares of Ceridian common shares for each share of Comdata -- and Comdata preferred shareholders will receive equivalent consideration -- for a total equity consideration of approximately $900 million. Lawrence Perlman, chairman and chief executive officer of Ceridian, said: "The Comdata acquisition is a major step forward in Ceridian's strategy of aggressively growing its information services business. Comdata has a strong position in two large and growing markets. In Comdata, we are adding a third leg to Ceridian's information services segment that has many important characteristics in common with Ceridian's current businesses. These include value-added services to customers, leadership in growing markets, a commitment to revenue growth along with a high level of recurring revenues, predictable earnings and cash flow, and strong customer relationships. (more) "Comdata is a profitable, growing company, and the transaction will allow Ceridian to accelerate utilization of its net operating loss carryforwards. In addition, because of the strength of Ceridian's balance sheet, we will be able to reduce the cost of Comdata's debt significantly." George L. McTavish, chairman and chief executive officer of Comdata, said: "This transaction will greatly enhance Comdata's operating and financial flexibility, which we believe will translate into increased growth. We think the operational model we have implemented so successfully in transportation and gaming can be replicated in other large vertical markets. We also think there are substantial opportunities for leveraging technology, cross-selling and other forms of cooperation with Ceridian's businesses. With the financial strength of Ceridian behind us, we are well positioned to pursue Comdata's growth opportunities aggressively." Under the terms of the agreement, Comdata will retain its name and operate as an independent unit of Ceridian Corporation. Its management team and 1,850 employees will remain with the company, and McTavish will report to Perlman. Ceridian expects certain one-time charges related to the refinancing of Comdata's outstanding indebtedness and costs related to the acquisition to be incurred in the quarter that the transaction closes. The transaction is expected to be tax-free to Comdata's shareholders and to be accounted for on a pooling-of-interests basis. Completion of the transaction is expected to occur before the end of 1995 and is subject to a number of conditions, including the approval of the shareholders of each company, no changes in reported ownership of Ceridian stock that would affect the continuing availability of its net operating loss carryforwards, and certain regulatory matters, including completion of the Hart-Scott- Rodino process. Details of the proposed transaction will be contained in a proxy statement to be filed shortly with the Securities and Exchange Commission. Welsh, Carson, Anderson & Stowe and Charterhouse, Inc., the holders of the majority of the outstanding shares of Comdata's convertible preferred stock, have separately agreed to vote in favor of the transaction. The Comdata acquisition will mark the eleventh acquisition since Ceridian was created in conjunction with the spin off of Control Data Systems, Inc. in 1992. Upon completion of the transaction, Ceridian's market capitalization is expected to have grown to over $3 billion from approximately $300 million in September 1991, just before Control Data Corporation undertook its reshaping plan. (more) 2 Comdata is a leading provider of funds transfer, fuel purchase, cash advance and permit services, as well as fleet optimization and routing software, for the transportation industry; point-of-sale and data collection services for the truck stop industry; and cash advance services for the gaming industry. The company, which was founded in 1969 and acquired in 1987 by a group of investors in a leveraged transaction, has been growing substantially in recent years. Revenue for the Brentwood, Tenn., based company is expected to total approximately $300 million in 1995. Ceridian, with estimated 1995 revenue of $1.0 billion, is a leading information services and defense electronics company. Its largest businesses are Ceridian Employer Services, the Arbitron Company and Computing Devices International. Bear Stearns & Co. is acting as financial advisor to Ceridian. Comdata is being advised by Lazard Freres & Co. 3 Fact Sheet Comdata Holdings Corporation Description Comdata Holdings Corporation (NASDAQ: CMDT) is a leading provider of transaction processing and information services to the transportation and gaming industries. Products The highly competitive transportation industry needs information services to improve productivity and customer service, and to lower its costs. Comdata supplies services that enable truck drivers to obtain funds for purchases at truck stops and to purchase fuel with an ID card; driver services that include cash advances, direct deposit, ATMs and safety training; permits and regulatory compliance services; backhaul information and logistics services for fleet optimization; routing software; and telephone and telecommunications services for trucking companies. For the fast-growing gaming industry, Comdata provides players with a full range of cash advance services, including credit card cash advances, ATMs, debit card processing, check authorization and acceptance services, and wire services. Customers Over 16,000 trucking companies, 8,000 truck stops and 900 gaming locations. Earnings and Comdata reported earnings of $28.1 million in 1994 on Revenue revenue of $243 million. Approximately 60 percent of the revenue came from transportation services, with the balance coming from gaming-related services. Employees andComdata has 1,850 employees, most of whom work at its Locations headquarters in Brentwood, Tenn., (near Nashville) and its Transceiver division (regulatory compliance services, permits and safety services) in Dallas. Year of Origin The company was founded in 1969 as Comdata Network, Inc. It became Comdata Holdings Corporation in 1987 when it was acquired by a group of investors in a leveraged recapitalization.