8-K: Current report
Published on
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UNITED STATES
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
April 4, 2005 (March 31, 2005)
Date of Report (Date of earliest event reported)
Pitney Bowes Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-3579 06-0495050
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
World Headquarters
1 Elmcroft Road
Stamford, Connecticut 06926-0700
(Address of principal executive offices)
(203) 356-5000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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 (see General Instruction A.2. below):
[ ] 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))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On March 31, 2005, Pitney Bowes Credit Corporation ("Spinco"), a wholly-owned
subsidiary of Pitney Bowes Inc. (the "Registrant"), entered into a Subscription
Agreement (the "Agreement") with Cerberus Capital Management, L.P. through its
investment vehicle, JCC Management LLC (the "Investor"), in connection with the
Registrant's sponsored spin-off of its Capital Services external financing
business. At the time of the spin-off, Spinco will become a separate entity from
the consolidated group of the Registrant and become a publicly traded company.
Pursuant to the Agreement, the Investor subscribed to purchase shares of Spinco
common stock ("Tranche I Stock") for a purchase price of approximately $28.5
million and shares of Non-Voting Series A Convertible Preferred Stock ("Tranche
II Stock") for a purchase price of approximately $87.2 million, each subject to
purchase price adjustments. Upon the issuance of the Tranche II Stock, (i) the
Tranche I Stock will represent a 19.9% voting interest in Spinco and a 12.9%
economic interest of the then issued and outstanding shares of Spinco common
stock on a fully diluted basis (including taking into account the shares of
common stock to be issued upon conversion of the Tranche II Stock) and (ii) the
Tranche II Stock will represent an economic interest in Spinco of 35.1% of the
then issued and outstanding shares of Spinco common stock on a fully diluted
basis (including taking into account the shares of common stock to be issued
upon conversion of the Tranche II Stock). The Investor will have the right to
convert the Tranche II Stock at any time after the second anniversary of the
spin-off (the "Spin-Off Date"), at the election of the Investor into fully paid
and nonassessable shares of Spinco's common stock.
The Agreement anticipates that the Registrant's stockholders will receive 80.1%
of Spinco common stock in a tax-free distribution. The stock distribution ratio
and record and distribution dates will be determined just prior to the Spin-Off
Date. The transactions are not subject to a vote of the Registrant's
stockholders.
The consummation of the spin-off and the issuance of the Tranche I Stock and the
Tranche II Stock are expected to be completed by the end of 2005. These
transactions are subject to customary conditions, which include but are not
limited, to the following:
o obtaining a favorable ruling from the Internal Revenue Service that the
contributions and distributions contemplated under the Agreement and
ancillary agreements will qualify as tax-free contributions and
distributions; and
o a registration statement (with respect to Spinco common stock that is to be
distributed to the Registrant's stockholders) has been declared effective
by the Securities and Exchange Commission.
The securities to be issued to the Investor in accordance with the Agreement
will be issued pursuant to a private placement and will not be registered under
the Securities Act of 1933. The Investor will, however, have demand registration
rights and piggy-back registration rights with respect to the Tranche I Stock
and the shares of common stock to be issued upon conversion of the Tranche II
Stock. The Investor may exercise demand registration rights at any time after
the 20 month anniversary of the Spin-Off Date.
ITEM 2.05. COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
The information contained in "Item 1.01 Entry into a Material Definitive
Agreement" of this current Report on Form 8-K is incorporated in this Item 2.05
by reference.
We estimate that we will incur after-tax transaction costs of about $20 million
to $35 million in connection with the spin-off. The majority of these costs will
be incurred at the time of the spin-off. These costs are composed primarily of
professional fees, taxes on asset transfers and lease contract termination fees.
In addition, in accordance with current accounting guidelines, at the time of
spin-off we will be required to compare the book and fair market values of the
assets and liabilities spun-off and record any resulting deficit as a charge in
discontinued operations. We currently estimate this potential non-cash after-tax
charge to be in the range of $150 million to $250 million. The ultimate amount
of this charge, if any, will be determined by the fair market value of Spinco at
the time of spin-off and the resolution of related tax liabilities.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release of Pitney Bowes Inc. dated April 4, 2005
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.
Pitney Bowes Inc.
April 4, 2005
/s/ B.P. Nolop
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B.P. Nolop
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
/s/ S.J. Green
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S.J. Green
Vice President - Finance and
Chief Accounting Officer
(Principal Accounting Officer)