UNITED STATES
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): JANUARY 6, 2006
PER-SE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-19480 58-1651222
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1145 SANCTUARY PARKWAY, SUITE 200, ALPHARETTA, GEORGIA 30004
(Address of principal executive offices) (Zip Code)
(770) 237-4300
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On January 6, 2006, in connection with the closing of the Merger (as
hereinafter defined), Per-Se Technologies, Inc. (the "Company" or the
"Registrant"), together with all of its domestic subsidiaries, entered into an
Amended and Restated Credit Agreement with a syndicate of lenders and with Bank
of America, N.A. serving as the Administrative Agent, Wachovia Bank, National
Association, serving as the Syndication Agent, and Banc of America Securities
LLC serving as Sole Lead Arranger and Sole Book Manager, that provided for
increases to the Company's existing credit facility (as so increased, the
"Credit Facility"). The Credit Facility provides for a $435 million term loan
and a $50 million revolving credit facility. The term loan bears interest at a
rate of LIBOR plus 2.25% or Base Rate (as defined in the Credit Facility) plus
1.25%, at the Company's option, and matures in seven years. The revolving credit
facility has an interest rate that varies between LIBOR plus 1.50% and LIBOR
plus 2.50%, or between Base Rate plus 0.50%, and Base Rate plus 1.50%, at the
Company's option, based on the Company's consolidated leverage ratio (as defined
in the Credit Facility), and matures in five years. All of the Company's
domestic subsidiaries have guaranteed the Credit Facility, and the Company and
such subsidiaries have granted security with respect to substantially all of
their real and personal property as collateral for the Credit Facility and the
related guarantees. The Credit Facility imposes limitations on the ability of
the Company and its subsidiaries to create or permit liens on their assets, make
investments, incur indebtedness, engage in certain mergers or other fundamental
changes, dispose of assets, make distributions or pay dividends or repurchase
stock, make material changes in the types of businesses conducted, prepay
subordinated debt, and engage in sale-leaseback transactions. In addition, the
Credit Facility requires the Company to maintain certain consolidated leverage
ratios, consolidated senior leverage ratios, and consolidated fixed charge
coverage ratios. The agents and lenders under the Credit Facility and their
affiliates have provided various investment banking, other commercial banking
and/or financial advisory services to the Company for which they have received
customary fees. The foregoing description of the Credit Facility does not
purport to be complete and is qualified in its entirety by the provisions of the
Credit Facility, which is filed as Exhibit 10.1 hereto.
In connection with the Credit Facility, the Company entered into a four
year interest rate swap agreement with Wachovia Bank, National Association, in
order to hedge against potential interest rate fluctuations resulting from the
variable interest rate under the terms of the Credit Facility. Pursuant to the
terms of the interest rate swap, the Company is obligated to periodically pay an
amount based on a fixed interest rate, and the Company will receive an amount
based on a variable rate. The variable rate is based on the three-month LIBOR
rate available at the time. By entering into the interest rate swap, the Company
has effectively fixed the maximum interest rate that the Company will pay on a
portion of the $435 million outstanding under the Credit Facility at 4.76% per
annum plus the applicable spread, which is 225 basis points. The amount of the
Credit Facility that is covered by the swap is $125 million in years one and
two, decreasing to $100 million in year three and $75 million in year four.
The interest rate swap will terminate on December 31, 2009, unless
sooner terminated pursuant to its terms. Notwithstanding the terms of the swap
agreement, the Company is
ultimately obligated for all amounts due and payable under the Credit Facility.
The effective date of the swap transaction was January 6, 2006.
The information reported below under Item 2.01 with respect to the
Stock Purchase Agreement, the Retail Informatics Agreement and the Data Supply
Agreement (each as hereinafter defined) is incorporated into this Item 1.01 by
reference. The information reported below under Item 5.02 with respect to
executive compensation increases is also incorporated into this Item 1.01 by
reference.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On January 6, 2006, the Company completed its previously announced
acquisition of NDCHealth Corporation ("NDCHealth"). Under the terms of the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of August 26,
2005, by and among the Company, NDCHealth and Royal Merger Co. ("Purchaser"),
Purchaser was merged with and into NDCHealth and NDCHealth became a wholly owned
subsidiary of the Company (the "Merger"). Upon the completion of the Merger,
each share of NDCHealth common stock was converted into the right to receive
$14.05 in cash and 0.2253 shares of Company common stock. The foregoing
description of the Merger Agreement does not purport to be complete and is
qualified in its entirety by the provisions of the Merger Agreement, which is
filed as Exhibit 2.1 hereto. A copy of the press release announcing the
completion of the Merger is filed as Exhibit 99.1 hereto.
Immediately prior to the Merger, NDCHealth completed the previously
announced sale of its information management business (the "Information
Management Sale") to affiliates of Wolters Kluwer N.V. for approximately $382.1
million in cash pursuant to a Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of August 26, 2005, by and among Wolters Kluwer Health,
Inc. ("WK Health"), NDC Health Information Services (Arizona) Inc. (the
"Information Management Subsidiary") and NDCHealth. The foregoing description of
the Stock Purchase Agreement does not purport to be complete and is qualified in
its entirety by the provisions of the Stock Purchase Agreement, which is filed
as Exhibit 2.2 hereto.
In connection with the Information Management Sale, NDCHealth and the
Information Management Subsidiary entered into a Data Supply and Services
Agreement (the "Data Supply Agreement") and a Retail Informatics and Services
Agreement (the "Retail Informatics Agreement"). The Data Supply Agreement sets
forth the terms and conditions pursuant to which NDCHealth and the Company will
provide the Information Management Subsidiary and WK Health with certain data
and related services. The data provided to the Information Management Subsidiary
under the Data Supply Agreement is generally the data processed by NDCHealth's
proprietary network and provided to NDCHealth's information management business
prior to the Information Management Sale under intercompany agreements or
practices and the data processed by the Company's proprietary network, in each
case to the extent that such data can be provided. The term of the Data Supply
Agreement is 20 years. The Retail Informatics Agreement sets forth the terms and
conditions pursuant to which the Information Management Subsidiary will provide
NDCHealth with access to certain data and related services. The data to which
the Information Management Subsidiary is required to provide access under the
Retail
Informatics Agreement is generally the pharmacy transaction data provided by
NDCHealth's information management business prior to the Information Management
Sale under intercompany agreements or practices. The term of the Retail
Informatics Agreement is 20 years, subject to NDCHealth's right to terminate the
agreement upon the fifth anniversary of the agreement. The foregoing description
of the Data Supply Agreement and the Retail Informatics Agreement does not
purport to be complete and is qualified in its entirety by the provisions of the
Data Supply Agreement and the Retail Informatics Agreement, which are filed as
Exhibit 10.2 hereto and Exhibit 10.3 hereto, respectively. The Registrant has
guaranteed the timely and complete performance of NDCHealth under and pursuant
to each of the Data Supply Agreement and the Retail Informatics Agreement.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN
OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A
REGISTRANT.
On January 6, 2006, the Company incurred an aggregate principal amount
of $435 million of indebtedness for term loans under the Credit Facility. Such
indebtedness was used to finance the cash portion of the Merger consideration
and pay fees and expenses associated with the Merger. The Company did not incur
any borrowings under the $50 million revolving credit portion of the Credit
Facility. The information reported below under Item 1.01 with respect to the
Credit Facility is incorporated into this Item 2.03 by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.
(c) Appointment of Principal Officer
On January 9, 2006, Chris E. Perkins, age 43, was appointed to the
newly created position of Chief Operating Officer of the Company. Mr. Perkins
has served as Executive Vice President and Chief Financial Officer of the
Company since February 2001. From April 2000 to February 2001, Mr. Perkins
served as Senior Vice President of Corporate Development of the Company. Mr.
Perkins will continue to act as Chief Financial Officer until a successor is
named. A copy of the press release announcing the appointment is filed as
Exhibit 99.2 hereto.
The annual base salary paid to Mr. Perkins under the existing
employment agreement between the Company and Mr. Perkins, which employment
agreement has been previously filed and described in the Company's prior reports
and filings and otherwise remains in effect, was increased, effective as of
January 9, 2006, from $325,000 to $425,000.
In addition, the annual base salary paid to the Company's Chairman,
President and Chief Executive Officer, Mr. Philip M. Pead, under the existing
employment agreement between the Company and Mr. Pead, which employment
agreement has been previously filed and described in the Company's prior reports
and filings and otherwise remains in effect, was increased, effective as of
January 9, 2006, from $500,000 to $650,000.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
The Company intends to file the financial statements required by this
Item by an amendment to this Report on or prior to March 28, 2006.
(b) Pro Forma Financial Information.
The Company intends to file the financial information required by this
Item by an amendment to this Report on or prior to March 28, 2006.
(c) Exhibits.
The following exhibits are filed with this Report:
EXHIBIT
NO. DESCRIPTION
--- -----------
2.1 Agreement and Plan of Merger, dated as of August 26, 2005, by
and among the Company, Purchaser and NDCHealth (incorporated
herein by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K filed on August 30, 2005). Schedules and
similar attachments to this exhibit have not been filed. The
Company agrees to furnish supplementally a copy of any of
these materials to the Securities and Exchange Commission upon
request.
2.2 Stock Purchase Agreement, dated as of August 26, 2005, by and
among WK Health, the Information Management Subsidiary and
NDCHealth (incorporated herein by reference to Exhibit 2.1 to
NDCHealth's Current Report on Form 8-K filed on August 29,
2005). Schedules and similar attachments to this exhibit have
not been filed. The Company agrees to furnish supplementally a
copy of any of these materials to the Securities and Exchange
Commission upon request.
10.1 Amended and Restated Credit Agreement, dated as of January 6,
2006, among the Company, certain domestic subsidiaries of the
Company, Bank of America, N.A., Wachovia Bank, National
Association, and the other lenders party thereto.
10.2 Data Supply and Services Agreement, dated as of January 6,
2006, by and among the Information Management Subsidiary,
NDCHealth and the Company.
10.3 Retail Informatics and Services Agreement, dated as of January
6, 2006, by and between the Information Management Subsidiary
and NDCHealth.
99.1 Press Release dated January 6, 2006.
99.2 Press Release dated January 9, 2006.
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.
Date: January 12, 2006
PER-SE TECHNOLOGIES, INC.
By: /s/ Chris E. Perkins
-------------------------------------
Name: Chris E. Perkins
Title: Executive Vice President, Chief
Operating Officer and Chief
Financial Officer
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
--- -----------
2.1 Agreement and Plan of Merger, dated as of August 26, 2005, by
and among the Company, Purchaser and NDCHealth (incorporated
herein by reference to Exhibit 2.1 to the Company's Current
Report on Form 8-K filed on August 30, 2005). Schedules and
similar attachments to this exhibit have not been filed. The
Company agrees to furnish supplementally a copy of any of
these materials to the Securities and Exchange Commission upon
request.
2.2 Stock Purchase Agreement, dated as of August 26, 2005, by and
among WK Health, the Information Management Subsidiary and
NDCHealth (incorporated herein by reference to Exhibit 2.1 to
NDCHealth's Current Report on Form 8-K filed on August 29,
2005). Schedules and similar attachments to this exhibit have
not been filed. The Company agrees to furnish supplementally a
copy of any of these materials to the Securities and Exchange
Commission upon request.
10.1 Amended and Restated Credit Agreement, dated as of January 6,
2006, among the Company, certain domestic subsidiaries of the
Company, Bank of America, N.A., Wachovia Bank, National
Association, and the other lenders party thereto.
10.2 Data Supply and Services Agreement, dated as of January 6,
2006, by and among the Information Management Subsidiary,
NDCHealth and the Company.
10.3 Retail Informatics and Services Agreement, dated as of January
6, 2006, by and between the Information Management Subsidiary
and NDCHealth.
99.1 Press Release dated January 6, 2006.
99.2 Press Release dated January 9, 2006.