-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dNwmIVrugh8oQ7Vc/IEqLNwMJnhcoyFMwiLMxy89a1d+8Sgn0YH/RuXSJj3tanoM O8TO8q7w4fg5vRTdxtMtAg== 0000799319-94-000011.txt : 19940207 0000799319-94-000011.hdr.sgml : 19940207 ACCESSION NUMBER: 0000799319-94-000011 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDB COMMUNICATIONS GROUP INC CENTRAL INDEX KEY: 0000799319 STANDARD INDUSTRIAL CLASSIFICATION: 4899 IRS NUMBER: 930933098 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 33 SEC FILE NUMBER: 033-52037 FILM NUMBER: 94504301 BUSINESS ADDRESS: STREET 1: 10525 W WASHINGTON BLVD CITY: CULVER CITY STATE: CA ZIP: 90232 BUSINESS PHONE: 2138709000 424B3 1 RULE 424B FILING PROSPECTUS File No. 33-52037 Filed pursuant to Rule 424(b)(3) 552,714 Shares LOGO IDB COMMUNICATIONS GROUP, INC. Common Stock This Prospectus covers the sale by certain holders (the "Selling Stockholders") of 552,714 shares of common stock, $.01 par value (the "Common Stock"), of IDB Communications Group, Inc., a Delaware corporation ("IDB" or the "Company"). This Prospectus also covers up to 1,188,335 additional shares of Common Stock issuable on February 4, 1994 pursuant to a 3.15-to-one split in the form of a 215 percent dividend payable to stockholders of record on January 21, 1994. The Selling Stockholders may offer shares of Common Stock from time to time to purchasers directly or through underwriters, dealers or agents. Such shares of Common Stock may be sold at market prices prevailing at the time of sale or at negotiated prices. The Common Stock is traded on the NASDAQ National Market System under the symbol "IDBX." The Company will not receive any of the proceeds from the sale of the shares of Common Stock by the Selling Stockholders. FOR INFORMATION CONCERNING CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is February 2, 1994 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be obtained from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is traded in the NASDAQ National Market System, and such reports, proxy statements and other information also can be inspected at the office of NASDAQ Operations, 1735 K Street, N.W., Washington, D.C. 20006. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents which have been filed by the Company with the Commission, as noted below, are incorporated by reference into this Prospectus: (a) Annual Report on Form 10-K for the year ended December 31, 1992 (as amended by Forms 10-K/A filed July 30, 1993 and August 11, 1993); (b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1993 (as amended by Form 10-Q/A filed July 30, 1993), June 30, 1993 and September 30, 1993; (c) Current Reports on Form 8-K filed with the Commission on November 2, 1992, January 5, 1993 (as amended by Form 8 filed March 4, 1993), February 4, 1993, April 29, 1993, May 11, 1993, June 24, 1993 (as amended by Form 8-K/A filed August 11, 1993), July 30, 1993, August 20, 1993, September 28, 1993, November 10, 1993, November 12, 1993 and November 19, 1993; (d) Report by Issuer of Securities Quoted on NASDAQ on Form 10-C filed on January 27, 1993, May 21, 1993 and September 28, 1993; (e) the description of the Company's Common Stock, $.01 par value (the "Common Stock"), contained in the Registration Statement on Form 8-A dated September 11, 1986, as supplemented by the description of the Common Stock contained on pages 37 through 41 of the Company's Proxy Statement dated July 17, 1992; and (f) Information Statement dated August 23, 1993. All of the above referenced documents were filed under Commission File No. 0- 14972. All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering of the Common Stock, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing such documents. Any statement contained herein or in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of this Prospectus, except as so modified or superseded. The Company will provide without charge to each person, including any beneficial owner, to whom a copy of this Prospectus is delivered, upon written or oral request of such person, a copy of any or all of the information that has been incorporated by reference in this Prospectus (excluding exhibits to such information which are not specifically incorporated by reference into such information). Requests for such information should be directed to IDB Communications Group, Inc., 10525 West Washington Boulevard, Culver City, California 90232-1922; Attention: Neil J Wertlieb, Secretary; Telephone (213) 870-9000. RISK FACTORS The following risk factors, in addition to the other information contained in or incorporated by reference in this Prospectus, should be carefully considered before purchasing the Common Stock offered hereby: Risks Associated with Growth Management and Acquisition Integration. The Company is currently experiencing a period of rapid growth, including expansion related to the Company's recent acquisitions of World Communications, Inc., a New York corporation ("WorldCom"), in the fourth quarter of 1992 and TRT Communications Inc., a Delaware corporation ("TRT"), in the third quarter of 1993. This growth has placed, and will continue to place, a strain on the Company's management and operational resources. Both WorldCom and TRT experienced operating losses during each of the past several years. The Company's future results will depend upon its ability to integrate WorldCom and TRT into the Company (including integration of WorldCom and TRT management information systems and controls) and to restructure their operations to improve their performance. Such restructuring, together with the continued growth of the Company's business, could place demands on the Company's liquidity and capital resources and may require the Company to seek additional financing in the future. To manage its growth effectively, the Company will need to continue to implement and improve its operational, financial and management information systems and to train, motivate and manage its employees. The Company intends to continue to evaluate opportunistic acquisitions which, if undertaken, could result in additional integration challenges. Dependence Upon Key Personnel. The success of the Company is dependent, in part, upon its key management and technical personnel. In particular, the Company is highly dependent upon Jeffrey P. Sudikoff, Chairman and Chief Executive Officer, and Edward R. Cheramy, President. The Company has obtained key-man life insurance on the lives of Messrs. Sudikoff and Cheramy in the amount of $5 million and $3 million, respectively. The Company believes that its future success will depend in large part upon its ability to attract, retain and motivate highly skilled employees, who are in great demand. Competition. The U.S.-based international communications services market, including telephone, telex, telegraph and private line services, is dominated by American Telephone & Telegraph Co., MCI Communications Corporation and U.S. Sprint Communications, Ltd. As the Company's network expands to serve a broader range of users, IDB expects to encounter increasing competition from major domestic and international communications companies, including these three carriers, which have significantly greater resources and more extensive domestic and international satellite and fiber optic communications networks than the Company. In the radio and television broadcast industry, the Company encounters competition from several of the larger companies in both the cable and telecommunications market as well as smaller, more entrepreneurial industry participants. In addition, in the future the Company may be subject to additional competition due to the development of new technologies. Government Regulation. The Company requires authorizations from the U.S. Federal Communications Commission (the "FCC") to operate all of its satellite transmission earth stations and its satellite earth stations that receive signals from international satellites or international points. The Company has operating authority or has made other suitable arrangements to transmit material from all locations where it currently offers satellite transmission service and has such authority where it receives such international signals. The Company must obtain authority from the FCC to operate circuits on international satellites and international fiber optic cable systems. FCC licensing decisions or changes in U.S. government policies increasing or decreasing access to non-Intelsat satellites or other network components could adversely affect the Company, particularly if such decisions or changes result in a reallocation of access rights among the Company and its competitors. Although the Company has never had a license application denied by the FCC, there can be no assurance that the Company will receive all authorizations or licenses necessary for new communications services or that delays in the licensing process will not adversely affect the Company's business. The Company's transmitting equipment must comply with FCC technical standards, which are subject to change, and can result in the premature obsolescence of equipment. Some of the Company's services are deemed common carriage and as such must be provided at just and reasonable rates on a nondiscriminatory basis. The Company monitors its compliance with federal, state and local regulations governing the discharge and disposal of hazardous and environmentally sensitive materials including the emission of electromagnetic radiation. Although the Company believes it is in compliance with such regulations, there can be no assurance that any such discharge, disposal or emission might not expose the Company to claims or actions that could have a material adverse effect on the Company's financial results. International Business. The Company derives substantial revenues by providing international communication services primarily to customers headquartered in the United States. Such operations are subject to certain risks such as changes in foreign government regulations and telecommunication standards, licensing requirements, tariffs or taxes and other trade barriers and political and economic instability. In addition, the Company's revenues and cost of sales are sensitive to changes in international settlement rates negotiated under operating agreements. Possible Unavailability of Leased Transmission Facilities. The Company operates in, and plans to expand into, markets that are not served by facilities owned by the Company, the profitability of which is based in part upon the Company's ability to transmit its customers' traffic on a cost-effective basis over leased facilities. The Company believes it has ample access to leased transmission facilities at cost-effective rates and expects to continue to have such access in the foreseeable future because technological improvements in recent years have increased the capacity of existing digital fiber optic and satellite-based transmission facilities. There can be no assurance, however, that such leased facilities will be available to the Company at cost- effective rates in the future. Volatility of Stock Price. The market price of the Company's Common Stock may be significantly affected by announcements of expanded services by the Company or its competitors, acquisitions of related companies and variations in quarterly operating results, among other factors. Within the past two years, the stock market has experienced volatility which has been unrelated to the operating results of traded companies. Such volatility, as well as general economic, political and market conditions, such as recessions and military conflicts, may adversely affect the market price of the Common Stock. The Company's Common Stock is currently trading at or near its highest historical sales price. SELLING STOCKHOLDERS The Common Stock covered by this Prospectus is being offered by the Selling Stockholders identified in the table below. The following table sets forth certain information as of the date hereof with respect to the Selling Stockholders and the shares of Common Stock offered hereby:
Shares Shares Name of Selling Beneficially Shares Beneficially Stockholder Owned Prior Offered Owned After To Offering Hereby Offering Jeffrey Barbakow (1) 325,000 325,000 0 Mezzonen S.A. (2) 169,419 169,419 0 Robert Landers (3) 42,000 42,000 0 Jonathan Gans (4) 16,295 16,295 0 Total 552,714 552,714 0
(1) Mr. Barbakow acquired 325,000 shares of Common Stock in exchange for cash consideration which was used to finance in part the repayment of certain debt by the Company in connection with the purchase of TC WorldCom AG ("WorldCom Europe"). Mr. Barbakow has acted as a consultant to the Company since December 1, 1991. (2) Mezzonen S.A., a Luxembourg corporation ("Mezzonen"), acquired 169,419 shares of Common Stock in exchange for cash consideration which was used to finance in part the Company's purchase of WorldCom Europe. (3) Mr. Landers acquired 42,000 shares of Common Stock in consideration for the purchase by the Company of certain audio network assets from Landco Labs, Inc., a California corporation that was wholly-owned by Mr. Landers at the time of the transaction. Mr. Landers has acted as a consultant since the Company's purchase of the audio network assets from Landco in July 1992. (4) Mr. Gans acquired 16,295 shares of Common Stock in connection with the acquisition of Common Stock by Mezzonen. PLAN OF DISTRIBUTION The Company has been advised by each Selling Stockholder that they each intend to sell all or a portion of their shares of Common Stock offered hereby from time to time to purchasers directly or through underwriters, dealers or agents, who may receive compensation in the form of underwriting discounts, concessions or commissions from them and/or purchasers of the shares of Common Stock for whom they may act as agent. Each Selling Stockholder will be responsible for payment of any and all commissions to brokers, which will be negotiated on an individual basis. Each Selling Stockholder and any underwriters, dealers or agents that participate in the distribution of the shares of Common Stock may be deemed to be underwriters, and any profit on the sale of such shares of Common Stock by them and any discounts, commissions or concessions received by any such underwriters, dealers or agents might be deemed to be underwriting discounts and commissions under the Securities Act of 1933, as amended (the "Securities Act"). At the time a particular offer of any of the shares of Common Stock is made, to the extent required, a supplement to this Prospectus will be distributed which will set forth the number of shares of Common Stock being offered and the terms of the offering, including the name or names of any underwriters, dealers or agents, any discounts, commissions or other items constituting compensation from each Selling Stockholder and any discounts, commissions or concessions allowed or re-allowed or paid to dealers. The shares of Common Stock may be sold in the over- the-counter market or in privately negotiated transactions. Sales of such shares in the over-the-counter market may be made by means of one or more of the following: a block trade in which a broker or dealer will attempt to sell shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; purchases by a dealer as principal and resale by such dealer for its account pursuant to this Prospectus; and ordinary brokerage transactions and transactions in which the broker solicits purchasers. In addition, any shares of Common Stock covered by this Prospectus which qualify may be sold pursuant to Rule 144 under the Securities Act rather than pursuant to this Prospectus. Each Selling Stockholder will be subject to applicable provisions of the Exchange Act, and the rules and regulations thereunder, including, without limitation, Rule 10b-2, 10b-6 and 10b-7, which provisions may limit the timing of purchases and sales of any of the shares of Common Stock by the Selling Stockholders. There is no assurance that any Selling Stockholder will sell any or all of the Common Stock described herein and may transfer, devise or gift such shares by other means not described herein. LEGAL MATTERS The validity of the shares offered hereby will be passed upon for the Company by Neil J Wertlieb, the General Counsel of the Company. Mr. Wertlieb holds 600 shares of Common Stock and options to purchase 16,300 shares of Common Stock, 1,574 of which are currently exercisable. EXPERTS The financial statements of IDB Communications Group, Inc. and its consolidated subsidiaries (except World Communications, Inc.) as of December 31, 1992 and 1991 and for each of the three years in the period ended December 31, 1992 and the related financial statement schedules incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1992, as amended, have been audited by Deloitte & Touche, independent auditors, as stated in their report, which is incorporated by reference herein. The financial statements of World Communications, Inc. (a consolidated subsidiary of the Company as of December 31, 1992), incorporated in this Prospectus by reference to the Company's Current Reports on Form 8-K filed with the Commission on November 2, 1992 and April 29, 1993, have been audited by BDO Seidman, independent auditors, as stated in their reports, which are incorporated by reference herein. The consolidated financial statements of TRT Communications, Inc., incorporated in this Prospectus by reference to the Company's Current Report on Form 8-K dated April 27, 1993 filed with the Commission on April 29, 1993, have been audited by Deloitte & Touche, independent auditors, as stated in their report, which is incorporated by reference herein. Such financial statements of IDB Communications Group, Inc., World Communications, Inc. and TRT Communications, Inc. have been incorporated by reference herein in reliance upon the respective reports of such independent auditors given upon their authority as experts in accounting and auditing. ADDITIONAL INFORMATION The Company has filed with the Commission a registration statement (the "Registration Statement") under the Securities Act, with respect to the securities offered hereby. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement, certain items of which are contained in schedules and exhibits to the Registration Statement as permitted by the rules and regulations of the Commission. Statements made in this Prospectus as to the contents of any contract, agreement or other document referred to are not necessarily complete. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference. Items and information omitted from this Prospectus but contained in the Registration Statement may be inspected and copied at the Public Reference Facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549.
No dealer, salesperson or other individual has been authorized to give any 552,714 Shares information or to make any representations other than those contained or incorporated by reference LOGO in this Prospectus in connection with the offer made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company, the Selling Stockholders or any underwriter or agent. Common Stock Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that ___________________ there has been no change in the affairs of the Company PROSPECTUS since the date hereof. ___________________ This Prospectus does not constitute an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation. __________________ TABLE OF CONTENTS Page February 2, 1994 Available Information 2 Incorporation of Certain Documents by Reference 2 Risk Factors 3 Selling Stockholders 4 Plan of Distribution 5 Legal Matters 5 Experts 5 Additional Information 6
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