8-K: Current report filing
Published on May 7, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
MAY 3, 1999
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Date of Report (Date of earliest event reported)
INTUIT INC.
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(Exact name of Registrant as specified in its charter)
DELAWARE 0-21180 77-0034661
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(State of (Commission file number) (I.R.S. Employer
incorporation) Identification No.)
2535 GARCIA AVENUE
MOUNTAIN VIEW, CALIFORNIA 94043
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(Address of principal executive offices, including zip code)
(650) 944-6000
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(Registrant's telephone number, including area code)
CONTENTS
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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On May 3, 1999, Intuit Inc. ("Intuit" or the "Company"), acquired all of
the outstanding stock of Computing Resources, Inc., a privately held Nevada
corporation ("CRI"), pursuant to an Exchange Agreement dated as of March 2,
1999, as amended by Amendment No. 1 thereto dated April 30, 1999 (together, the
"Exchange Agreement") among Intuit, CRI and CRI's only shareholders, Ranson W.
Webster and Harry D. Hart (the "CRI Shareholders"). Immediately prior to
Intuit's acquisition of the outstanding stock of CRI, CRI owned 79% of the
outstanding stock of Computing Transaction Corporation, a California corporation
that is a subsidiary of CRI ("CTC"). Pursuant to the Exchange Agreement, Intuit
also acquired from the CRI Shareholders all the outstanding stock of CTC not
owned by CRI.
Intuit purchased CRI's outstanding stock directly from the CRI
Shareholders in exchange for: (i) Intuit's payment to the CRI Shareholders, as a
group, the total sum of $96,569,180.23 in cash (the "Closing Payment"); (ii)
Intuit's issuance to the CRI Shareholders, as a group, of a total of 288,816
shares of Intuit Common Stock and (iii) Intuit's agreement to pay the CRI
Shareholders, as a group, an additional $73,576,000 in cash in three annual
installments of $24,288,000, $24,288,000 and $25,000,000 each on May 3, 2000,
2001 and 2002, respectively (the "Installment Payments"). To the extent that
Intuit is not required to make $1,424,000 of bonus payments to CRI employees
under an Employee Bonus Agreement dated April 30, 1999, such payments are to be
paid to the CRI Shareholders in proportion to the percentage of the outstanding
shares of CRI they owned immediately prior to the closing of Intuit's purchase
of CRI under the Exchange Agreement. Pursuant to the Exchange Agreement, the CRI
Shareholders also directly sold to Intuit the 21% of the outstanding stock of
CTC not owned by CRI in exchange for a cash payment to them of $279,510, so that
Intuit and CRI together own 100% of CTC's outstanding stock. The funds
comprising the $96,569,180.23 Closing Payment paid to the CRI Shareholders were
derived from Intuit's working capital cash reserves. Intuit currently expects
that the future payment of the Installment Payments will also be funded from its
working capital. In connection with the Exchange Agreement, Intuit paid off a
CRI credit facility which had an approximately $5 million balance.
CRI was incorporated in 1978 and is engaged in the business of providing
outsourced payroll administration services to small businesses. These services
include the computation of payroll check and payroll tax calculations, the
preparation of payroll checks, the preparation and/or filing of payroll tax
returns and the making of payroll tax deposits with U.S. federal and state
taxing authorities, the making of electronic direct deposits of employee
paychecks with banks and other financial institutions, and preparing W-2 forms
and computing payments relating to employee benefit plans. CRI frequently
provides its services on a private label basis through banks, other financial
institutions and other organizations. Pursuant to an existing agreement with
Intuit, CRI also provides payroll processing services to users of Intuit's
QuickBooks product who elect to utilize CRI's services via QuickBooks. Intuit
intends to continue to conduct CRI's payroll processing business following the
acquisition. In its fiscal year ended December 31, 1998, CRI had revenue of
approximately $32.5 million and net income of approximately $5.6 million.
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The shares of Intuit Common Stock issued to the CRI Shareholders under the
Exchange Agreement were not registered under the Securities Act of 1933, as
amended (the "1933 Act"), in reliance upon the exemptions from registration
provided by Section 4(2) thereof and/or Rule 506 promulgated under Regulation D.
Intuit and the CRI Shareholders have entered into a Registration Rights
Agreement, pursuant to which Intuit granted the CRI Shareholders certain rights
to have the resale of the shares of Intuit Common Stock issued to them under the
Exchange Agreement (the "Registrable Shares") registered under the 1933 Act.
Under the terms of the Registration Rights Agreement, until May 3, 2000, Intuit
is to maintain in effect a shelf registration on Form S-3 pursuant to Rule 415
under the 1933 Act covering the resale by the CRI Shareholders of Registrable
Shares held by them during specified permitted time periods.
Intuit will account for its acquisition of CRI and CTC under the purchase
method of accounting. As a result, the excess of the purchase price over the
fair value of identified tangible assets acquired, less the fair value of
liabilities assumed, will be capitalized by the Company.
Intuit's acquisition of the outstanding shares of the stock of CRI from
the CRI Shareholders will be a taxable transaction to the CRI Shareholders and,
in connection with this transaction, Intuit intends to file an election under
Section 338(h)(10) of the Internal Revenue Code, under which the purchase of the
CRI shares will be treated, for U.S. federal income tax purposes, as a taxable
purchase of assets by Intuit. Pursuant to this U.S. tax election, Intuit expects
to obtain a step-up in the tax basis of the assets of CRI.
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
It is impracticable for Intuit to currently provide the required financial
statements for Computing Resources, Inc. called for by Item 7(a). Pursuant to
paragraph (a)(4) of Item 7 of Form 8-K, the financial statements of Computing
Resources, Inc. required to be filed under paragraph (a) of this Item 7 will be
filed as soon as practicable, but not later than required by Item 7 of Form 8-K.
(b) PRO FORMA FINANCIAL INFORMATION.
It is impracticable for Intuit to currently provide the pro forma
financial information with respect to the acquisition of Computing Resources,
Inc. by Intuit called for by this Item 7(b). Pursuant to paragraphs (b)(2) and
(a)(4) of Item 7, the pro forma financial statements required to be filed under
paragraph (b) of this Item 7 will be filed as soon as practicable, but not later
than required by paragraphs (b)(2) and (a)(4) of Item 7 of Form 8-K.
(c) EXHIBITS
The following exhibits are filed herewith:
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2.01 Exchange Agreement dated as of March 2, 1999 by and among
Registrant, Computing Resources, Inc., Ranson W. Webster and Harry
D. Hart and Amendment No. 1 thereto dated April 30, 1999. Pursuant
to Item 601(b)(2) of Regulation of S-K, certain schedules have been
omitted but will be furnished supplementally to the Commission upon
request.
4.01 Registration Rights Agreement dated as of May 3, 1999 by and among
Registrant, Ranson W. and Norma J. Webster and Harry D. and Carla J.
Hart.
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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 thereunto duly authorized.
INTUIT INC.
By: /s/ Greg J. Santora
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Date: May 7, 1999 Greg J. Santora
Senior Vice President and
Chief Financial Officer
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