-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WWFeXJKELSdD3L42uhHQui44hlp4U6U1FFc6jfCrTbQfrVeZ/zHLIJOsNuYzfhsz iAQdMxF43gWOII9fy2yHaQ== /in/edgar/work/20000609/0000950144-00-007703/0000950144-00-007703.txt : 20000919 0000950144-00-007703.hdr.sgml : 20000919 ACCESSION NUMBER: 0000950144-00-007703 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000526 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUINTILES TRANSNATIONAL CORP CENTRAL INDEX KEY: 0000919623 STANDARD INDUSTRIAL CLASSIFICATION: [8731 ] IRS NUMBER: 561714315 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-23520 FILM NUMBER: 652512 BUSINESS ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: RIVERBIRCH BLDG STE 200 CITY: DURHAM STATE: NC ZIP: 27703-8411 BUSINESS PHONE: 9199982000 MAIL ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 CITY: DURHAM STATE: NC ZIP: 27703-8411 8-K 1 0001.txt QUINTILES TRANSNATIONAL CORP 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 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): May 26, 2000 QUINTILES TRANSNATIONAL CORP. (Exact name of registrant as specified in its charter) NORTH CAROLINA 340-23520 56-1714315 (State or other (Commission File No.) I.R.S. Employer jurisdiction Identification Number of incorporation) 4709 CREEKSTONE DRIVE, RIVERBIRCH BUILDING, SUITE 200, DURHAM, NORTH CAROLINA 27703-8411 (Address of principal executive offices) (919) 998-2000 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On May 26, 2000, Quintiles Transnational Corp. completed the previously announced sale of its electronic data interchange unit, ENVOY Corporation, to Healtheon/WebMD Corporation. Healtheon/WebMD acquired ENVOY from Quintiles in exchange for 35 million shares of Healtheon/WebMD common stock and $400 million cash. Quintiles issued Healtheon/WebMD a warrant to purchase up to 10 million shares of Quintiles common stock at $40 per share, exercisable for four years. A copy of the May 30, 2000 press release announcing the completion of the transaction is attached hereto as Exhibit 99.01 and incorporated herein by reference. The description contained in the press release of the agreement, and the transactions contemplated thereby, does not purport to be complete and is qualified in its entirety by reference to the agreement incorporated by reference as an exhibit hereto. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (b) PRO FORMA FINANCIAL INFORMATION. 3 Quintiles Transnational Corp. Unaudited Pro Forma Consolidated Condensed Financial Data On May 26, 2000, Quintiles Transnational Corp. (the "Company") completed the previously announced sale of its electronic data interchange unit, ENVOY Corporation ("ENVOY") to Healtheon/WebMD Corporation ("Healtheon/WebMD"). Healtheon/WebMD acquired ENVOY from the Company in exchange for 35 million shares of Healtheon/WebMD common stock and $400 million cash. The Company issued Healtheon/WebMD a warrant to purchase up to 10 million shares of the Company's Common Stock at $40 per share, exercisable for four years. The following unaudited pro forma condensed consolidated balance sheet at March 31, 2000 gives effect to the disposition by the Company of its wholly owned subsidiary, ENVOY, as if the disposition had occurred at March 31, 2000 and the unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2000 and for the year ended December 31, 1999 give effect to such disposition as if it had occurred on January 1 of each period. ENVOY has been treated as a discontinued operation in the Company's historical financial statements. The unaudited pro forma financial information does not purport to be indicative of either the results of future operations or the results of operations that would have occurred had the disposition been consummated on the dates indicated. The pro forma financial information is based upon currently available information and certain assumptions that the Company believes are reasonable under the circumstances. The unaudited pro forma financial statements should be read in conjunction with the Company's historical consolidated financial statements and notes thereto previously filed in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, and the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2000. 4 Quintiles Transnational Corp. Unaudited Pro Forma Consolidated Condensed Balance Sheet As of March 31, 2000 (In thousands)
Pro forma Adjustments Historical DR/(CR) Pro forma --------------- ------------- ------------ Assets Current assets: Cash and cash equivalents $ 139,487 400,000 (a) $ 395,740 (143,747)(g) Trade accounts receivable and unbilled services,net 417,364 0 417,364 Investments in debt securities 32,801 0 32,801 Prepaid expenses 42,653 0 42,653 Other current assets and receivables 38,029 0 38,029 Net assets of discontinued operations 133,645 (133,645)(b) 0 --------------- ------------- ------------ Total current assets 803,979 122,608 926,587 Property and equipment 578,602 0 578,602 Less accumulated depreciation (186,991) 0 (186,991) --------------- ------------- ------------ 391,611 0 391,611 Intangibles and other assets: Goodwill, net 200,984 0 200,984 Other intangibles, net 3,002 0 3,002 Investments in debt securities 78,009 0 78,009 Investments in marketable equity securities 61,050 447,353 (a) 508,403 Deferred income taxes 79,791 0 79,791 Deposits and other assets 42,758 0 42,758 --------------- ------------- ------------ 465,594 447,353 912,947 --------------- ------------- ------------ Total assets $ 1,661,184 569,961 $ 2,231,145 =============== ============= ============ Pro forma Adjustments Historical DR/(CR) Pro forma --------------- ------------- ------------ Liabilities and Shareholders' Equity Current liabilities: Lines of credit $ 430 0 $ 430 Accounts payable and accrued expenses 283,243 60,000 (c) 343,243 Credit arrangements, current 157,109 (143,747)(g) 13,362 Unearned income 178,174 0 178,174 Income taxes and other current liabilities 10,853 144,400 (d) 155,253 --------------- ------------- ------------ Total current liabilities 629,809 60,653 690,462 Long-term liabilities: Credit arrangements, less current portion 8,598 0 8,598 Long-term liabilities 14,300 0 14,300 Deferred income taxes and other liabilities 41,994 40,022 (d) 82,016 --------------- ------------- ------------ 64,892 40,022 104,914 --------------- ------------- ------------ Total liabilities 694,701 100,675 795,376 Shareholders' equity: Preferred stock 0 0 0 Common stock and additional paid in capital 786,830 0 786,830 Retained earnings 177,496 436,286 (e) 613,782 Accumulated other comprehensive income 4,337 0 4,337 Other equity (2,180) 33,000 (f) 30,820 --------------- ------------- ------------ Total shareholders' equity 966,483 469,286 1,435,769 --------------- ------------- ------------ Total liabilities and shareholders' equity $ 1,661,184 569,961 $ 2,231,145 =============== ============= ============
5 Quintiles Transnational Corp. Unaudited Pro Forma Consolidated Condensed Statement of Operations For the three months ended March 31, 2000 (In thousands, except per share data)
Pro forma Historical Adjustments Pro forma --------------- ------------ ------------ Net revenue $ 414,845 0 $ 414,845 Costs and expenses: Direct 255,476 0 255,476 General and administrative 135,062 0 135,062 Depreciation and amortization 23,122 0 23,122 Restructuring charge 58,592 0 58,592 --------------- ------------ ------------ Total costs and expenses 472,252 0 472,252 Loss from continuing operations (57,407) 0 (57,407) Total other income (expense), net 1,948 1,527 (g) 3,475 --------------- ------------ ------------ (Loss) income from continuing operations before income taxes (55,459) 1,527 (53,932) Income tax (benefit) expense (18,300) 504 (g) (17,796) --------------- ------------ ------------ (Loss) income from continuing operations before extraordinary gain $ (37,159) 1,023 $ (36,136) =============== ============ ============ Basic and diluted loss from continuing operations before extraordinary gain per share $ (0.32) $ (0.31) Shares used in computing loss from continuing operations before extraordinary gain per share: 115,392 115,392
6 Quintiles Transnational Corp. Unaudited Pro Forma Consolidated Condensed Statement of Operations For the year ended December 31, 1999 (In thousands, except per share data)
Pro forma Historical Adjustments Pro forma --------------- ------------- ------------ Net revenue $ 1,607,087 0 $ 1,607,087 Costs and expenses: Direct 883,274 0 883,274 General and administrative 505,166 0 505,166 Depreciation and amortization 82,292 0 82,292 --------------- ------------- ------------ Total costs and expenses 1,470,732 0 1,470,732 Income from continuing operations 136,355 0 136,355 Other income (expense): Interest income 14,391 0 14,391 Interest expense (11,233) 6,109 (g) (5,124) Transaction costs (26,322) 0 (26,322) Other 2,719 0 2,719 --------------- ------------- ------------ Total other income (expense), net (20,445) 6,109 (14,336) --------------- ------------- ------------ Income from continuing operations before income taxes 115,910 6,109 122,019 Income taxes 42,742 1,833 (g) 44,575 --------------- ------------- ------------ Income from continuing operations before extraordinary gain $ 73,168 4,276 $ 77,444 =============== ============= ============ Basic income from continuing operations before extraordinary gain per share $ 0.64 $ 0.68 Diluted income from continuing operations before extraordinary gain per share $ 0.63 $ 0.67 Shares used in computing income from continuing operations before extraordinary gain per share: Basic 113,525 113,525 Diluted 115,687 115,687
7 Quintiles Transnational Corp. Notes to Unaudited Pro Forma Consolidated Condensed Financial Statements (In thousands) On May 26, 2000, the Company completed the previously announced sale of its electronic data interchange unit, ENVOY, to Healtheon/WebMD. Healtheon/WebMD acquired ENVOY from the Company in exchange for 35 million shares of Healtheon/WebMD common stock and $400 million cash. The Company issued Healtheon/WebMD a warrant to purchase up to 10 million shares of the Company's Common Stock at $40 per share, exercisable for four years. (a) To record receipt of consideration from Healtheon/WebMD (b) To record the removal of net assets of discontinued operations sold (c) To record estimated transaction and employee termination costs (d) To record estimated income taxes payable on estimated gain on disposition (e) To record estimated gain on disposition (f) To record estimated fair value of warrant issued to Healtheon/WebMD (g) The company intends to use a portion of the proceeds to retire its outstanding 4.25% Convertible Subordinated Notes due May 31, 2000. Interest expense and related tax effect have been adjusted to reflect this retirement. 8 (c) Exhibits. Exhibit Number Description of Exhibit - -------------- ---------------------- 2.01 Agreement and Plan of Merger, dated as of January 22, 2000, among Quintiles Transnational Corp., Healtheon/WebMD Corporation, Pine Merger Corp, Envoy Corporation and QFinance, Inc.* 99.01 Press Release, dated May 30, 2000, of Quintiles Transnational Corp. *Previously filed as Exhibit 2.01 to Quintiles' Current Report on Form 8-K dated January 25, 2000 and incorporated by reference herein. 9 SIGNATURES 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. QUINTILES TRANSNATIONAL CORP. By: /s/ James L. Bierman ----------------------------- Dated: June 9, 2000 James L. Bierman Chief Financial Officer 10 EXHIBIT INDEX Exhibit Number Description of Exhibit - -------------- ---------------------- 2.01 Agreement and Plan of Merger, dated as of January 22, 2000, among Quintiles Transnational Corp., Healtheon/WebMD Corporation, Pine Merger Corp, ENVOY Corporation and QFinance, Inc.* 99.01 Press Release, dated May 30, 2000, of Quintiles Transnational Corp. *Previously filed as Exhibit 2.01 to Quintiles' Current Report on Form 8-K dated January 25, 2000 and incorporated by reference herein. EX-99.01 2 0002.txt PRESS RELEASE 1 [Healtheon / WebMD Logo] [Quintiles Transnational Logo] FOR IMMEDIATE RELEASE CONTACTS: HEALTHEON/WEBMD: QUINTILES TRANSNATIONAL CORP: Investor Relations Investor Relations Lew Belote Greg Connors 404 495 7602 919 998 2000 lbelote@webmd.net invest@quintiles.com Media Relations Media Relations Dave Faupel Pat Grebe 404 897 2300 919 998 2031 dfaupel@alexanderogilvy.com pat.grebe@quintiles.com HEALTHEON/WEBMD COMPLETES ACQUISITION OF QUINTILES' ENVOY UNIT HEALTHEON/WEBMD ENHANCES NETWORK WITH GREATER PAYOR, PROVIDER AND PATIENT CONNECTIVITY THROUGH ENVOY RELATIONSHIPS QUINTILES AND HEALTHEON/WEBMD TO ACCELERATE CO-DEVELOPMENT OF INTEGRATED SUITE OF WEB-ENABLED PRODUCTS TO IMPROVE DRUG DEVELOPMENT AND COMMERCIALIZATION ATLANTA and RESEARCH TRIANGLE PARK, N.C. - May 30, 2000 - Healtheon/WebMD Corporation (Nasdaq: HLTH) and Quintiles Transnational Corp. (Nasdaq: QTRN) today announced completion of Healtheon/WebMD's acquisition of Quintiles' electronic data interchange unit, ENVOY Corporation, under the financial terms originally announced on Jan. 24, 2000. In 1999, ENVOY's network processed more than 1.4 billion medical, pharmacy and dental transactions involving about 250,000 physicians, 35,000 pharmacies, 47,000 dentists, 4,500 hospitals and 900 payors. With the acquisition of ENVOY, Healtheon/WebMD will process more than 2 billion transactions a year for U.S. healthcare customers. As announced on Jan. 24, 2000, Healtheon/WebMD acquired ENVOY from Quintiles in exchange for 35 million shares of Healtheon/WebMD stock and $400 million in cash. Quintiles has issued Healtheon/WebMD a warrant to purchase up to 10 million shares of Quintiles common stock at $40 per share, exercisable for four years. The acquisition was treated as a purchase transaction for accounting purposes. Also as part of the agreement, Quintiles and Healtheon/WebMD are jointly developing an integrated series of Web-based products to vastly improve the efficiency of drug development and commercialization; and Quintiles is Healtheon/WebMD's exclusive licensee for creating healthcare informatics products. Immediately upon the closing of the acquisition, Healtheon/WebMD and ENVOY are executing the integration of payors with connectivity to ENVOY into Healtheon/WebMD's professional portal, WebMD Practice(SM). The next generation of WebMD Practice will bring physician 2 practice managers and other administrators improved usability and the ability to perform real-time transactions with a significantly expanded group of insurers. Planned integration initiatives also include the consolidation of Healtheon/WebMD's existing EDI operations into ENVOY, which will be led by ENVOY Chief Executive Officer Jim Kever, and Fred C. Goad, chairman of ENVOY. "The completion of our acquisition of ENVOY significantly enhances our network with greater payor connectivity, accelerating our goal of using the Internet to provide better access to information for all participants in the healthcare industry including doctors, consumers and healthcare institutions," said Jeff Arnold, chief executive officer of Healtheon/WebMD. "We will immediately execute the plan for the complete integration of ENVOY, which we began preparing in February. We're pleased that the senior management team of ENVOY is remaining with the company to run the ENVOY operations from Nashville, where the company is based." Dennis Gillings, chairman and chief executive officer of Quintiles Transnational, said: "I believe completion of this deal marks the beginning of a new era of vastly improved healthcare transaction and information delivery to all stakeholders in the system - patients, doctors, payors and pharmaceutical companies. Teams from Quintiles and Healtheon/WebMD have been working since February to plan a new Web-based system to improve the efficiency of drug development and bring new medicines to patients sooner. With the closing of this deal, those efforts will now dramatically accelerate." Gillings will be appointed to the Healtheon/WebMD Board of Directors in the near future. ABOUT HEALTHEON/WEBMD Healtheon/WebMD (Nasdaq: HLTH) is the first end-to-end Internet healthcare company connecting physicians and consumers to the entire healthcare industry. Healtheon/WebMD is using the Internet to facilitate a new system for the delivery of healthcare, resulting in a single, secure environment for all communications and transactions that will enable a more efficient and cost effective healthcare system. Healtheon/WebMD has its corporate headquarters in Atlanta and its technology headquarters in Silicon Valley. For more information visit http://www.webmd.com. Other than historical information set forth herein, information in this press release contains "forward-looking statements." These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the ability of Healtheon/WebMD's services to decrease costs and improve patient care, Healtheon/WebMD's limited operating history, continued growth in the use of the Internet, acceptance of the Internet as a secure medium over which to conduct transactions, the performance of Healtheon/WebMD and risks associated with its business, the volatility of the market for Healtheon/WebMD stock, actual operating performance, the ability to operate successfully in various strategic alliances, the ability to maintain large client contracts or to enter into new contracts, and the competition from other participants in the healthcare industry. Additional factors that could cause actual results to differ materially are discussed in each of Healtheon/WebMD's recent filings with the Securities and Exchange Commission, including but not limited to S-1 and S-4 Registration Statements, Annual Reports on Form 10-K, Form 8-Ks, and other periodic reports, including Form 10-Qs. 3 ABOUT QUINTILES TRANSNATIONAL CORP. Quintiles Transnational Corp. improves healthcare by bringing new medicines to patients faster and providing knowledge-rich medical and drug data to advance the quality and cost effectiveness of healthcare. Quintiles is the global market leader in helping pharmaceutical, biotechnology and medical device companies market and sell their products; and the company provides insightful market research solutions and strategic analyses to support healthcare decisions. Quintiles Transnational is headquartered near Research Triangle Park, North Carolina, and has about 20,000 employees in 31 countries. Quintiles is a member of the S&P 500, Fortune 1000 and Nasdaq 100. For more information visit www.quintiles.com. Information in this press release contains "forward-looking statements" about a number of matters, including, without limitation, our Internet strategy, the ability to maintain large client contracts or to enter into new contracts, overall industry conditions, the ability to create data products from data licensed to us, the ability to operate successfully in new lines of business and, with respect to our strategic alliance with Healtheon/WebMD, risks associated with Healtheon/WebMD's business as set forth in its filings with the Securities and Exchange Commission. Additional factors that could cause actual results to differ materially are discussed in the company's recent filings with the Securities and Exchange Commission, including but not limited to its S-3 and S-4 Registration Statements, its Annual Report on Form 10-K, its Form 8-Ks, and its other periodic reports, including Form 10-Qs. # # # -----END PRIVACY-ENHANCED MESSAGE-----