-----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, Pm2ESv13+zwlTTpTZHQT8JOIyM2WLOOobU+bD2I+v4Ww6hI9aGRKI/wjTxn4t3hW kBzFcuxi6kOtBs7wwD/etg== 0000912057-01-508631.txt : 20010416 0000912057-01-508631.hdr.sgml : 20010416 ACCESSION NUMBER: 0000912057-01-508631 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010402 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010413 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARCHFIRST INC CENTRAL INDEX KEY: 0001009403 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 363797833 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-28166 FILM NUMBER: 1602240 BUSINESS ADDRESS: STREET 1: 311 SOUTH WACKER DR STREET 2: STE 3500 CITY: CHICAGO STATE: IL ZIP: 60606-6618 BUSINESS PHONE: 3129229200 MAIL ADDRESS: STREET 1: 311 S WACKER DR STE3500 CITY: CHICAGO STATE: IL ZIP: 60606-6618 FORMER COMPANY: FORMER CONFORMED NAME: WHITTMAN HART INC DATE OF NAME CHANGE: 19960301 8-K 1 a2045523z8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): April 2, 2001 ------------- marchFIRST, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-28166 36-3797833 - ---------------------------- ------------ ------------------ (State or Other Jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 311 South Wacker Drive, Suite 3500, Chicago, Illinois 60606-6618 ----------------------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (312) 922-9200 -------------- Item 2. Acquisition or Disposition of Assets. On April 2, 2001, the Company completed the sale of its Central Region business unit, and certain other offices and assets to divine, inc., a Chicago-based web enterprise solutions company. In exchange for these assets, the Company received $6.25 million in cash, an additional $27.75 million note payable over not more than five years, and up to an additional $39 million payable over five years which is contingent on the unit's future performance. Also on April 2, 2001, the Company announced that it had entered into an agreement with divine for the sale of certain other business units and assets. On April 12, 2001, the Company completed the sale of its SAP implementation practice, its value-added reseller business and other assets, which include its interest in BlueVector LLC to divine, inc. pursuant to the agreement referred to above. divine did not exercise its option to purchase the Company's HostOne application hosting unit. The purchase price for these business units and assets is $6.25 million in cash, an additional $29.75 million note payable over not more than five years, and up to an additional $16 million payable over five years which is contingent on the units' future performance. Also, on April 12, 2001 the Company completed the sale of certain other business units, including McKinney & Silver, Inc. and the Company's Salt Lake City office. The aggregate purchase price for these business units was approximately $13.6 million and the assumption of liabilities of approximately $17.0 million. On April 2, 2001 and April 12, 2001, the Company issued press releases related to these transactions. A copy of the press releases are filed as Exhibits 99.1 and 99.2. Item 5. Other Events. On April 12, 2001 the Company announced that, consistent with its prior public disclosure, it continues in its general inability to satisfy creditor obligations as they become due and continues to suffer from liquidity shortfalls and less than necessary cash reserves. Accordingly, on April 12, 2001 the Company and its domestic subsidiaries and affiliates filed for relief under Chapter 11 of the Federal Bankruptcy Code. Also on April 12, 2001, the Company announced that it does not intend to file with the SEC an Annual Report on Form 10-K for the year ended December 31, 2000 and that for this and other reasons, believes its stock will be delisted from trading on the Nasdaq National Market. The press release filed as Exhibit 99.2 describes the bankruptcy filing in greater detail. Item 7. Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated April 2, 2001. 99.2 Press Release dated April 12, 2001. 2 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. marchFIRST, Inc. Dated: April 13, 2001 By: /s/ Steven Pollema ---------------------------------- Steven Pollema President 3 EXHIBIT INDEX ------------- Exhibit No. Exhibit - ----------- ------- 99.1 Press Release dated April 2, 2001. 99.2 Press Release dated April 12, 2001. 4 EX-99.1 2 a2045523zex-99_1.txt PRESS RELEASE DATED 4/2/01 EXHIBIT 99.1 MARCHFIRST ANNOUNCES PARTIAL SALE OF OPERATIONS, AGREEMENT FOR FUTURE SALE OF SAP AND HOSTONE COMPANY ALSO REPORTS; o EXTENSION OF LOAN AGREEMENT WITH AMERICAN NATIONAL BANK o REDUCTION IN FORCE CHICAGO (April 2, 2001) - marchFIRST, Inc. (Nasdaq: MRCH), a global professional services company, announced the sale today of its Central Region business unit, and certain other offices and assets to divine, Inc. (Nasdaq: DVIN), a Chicago-based web enterprise solutions company. The Company is receiving $6.25 million at closing, an additional $27.75 million note payable over not more than five years, and up to an additional $39 million payable over five years which is contingent on the unit's future performance. The Company also has entered into an agreement with divine for the sale of its SAP practice, its VAR business and other assets, which may include HostOne and its interest in BlueVector LLC, subject to anti-trust approval. The Company expects this transaction to close promptly. The purchase price for these business units and assets is $6.25 million at closing, an additional $29.75 million note payable over not more than five years, and up to an additional $16 million payable over five years which is contingent on the units' future performance. The operations sold as part of these transactions comprise 2,100 employees, which include the SAP practice headquartered in Denver and 19 other offices, including: Austin, Chicago, Cincinnati, Cleveland, Columbus, Ohio; Dallas, Detroit, Grand Rapids, Houston, Indianapolis, Irvine, California; Los Angeles, Milwaukee, Minneapolis, Pittsburgh, Santa Monica, St. Louis, Hong Kong and Toronto, Canada. In addition, the Company announced that the maturity of its loan agreement with American National Bank and Trust Company of Chicago has been extended through June 15, 2001. The Company continues to have significant liquidity difficulties and is pursuing alternatives to satisfy obligations to the bank and other creditors and meet the needs of its employees and clients. Finally, the Company stated that it is actively pursuing sales of other business units. To increase the value of these individual units, the Company is immediately implementing a reduction in force affecting approximately 1,700 employees or 30% of the Company's staff. The Company is also closing its Australian operations. Cautionary Note Regarding Forward-Looking Statements This news release contains forward-looking statements that reflect marchFIRST's current expectations about its future results, performance, prospects and opportunities. marchFIRST has tried to identify these forward-looking statements by using words such as "believe," "expect," "anticipate," "intend," and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause marchFIRST's actual results, performance, financial condition, prospects or opportunities in 2001 and beyond to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, the development of the marketplace for e-commerce solutions and other factors affecting market demand, marchFIRST's ability to meet its cash needs, the success of marchFIRST's cost-reduction efforts, changes in business plans and financial models that may result from any financing or strategic transactions entered into by marchFIRST, foreign currency exchange rate fluctuations and other risks associated with international business, marchFIRST's ability to attract and retain highly skilled employees, marchFIRST's ability to accurately estimate the cost, scope and duration of fixed-price client engagements, marchFIRST's ability to collect amounts billed for client engagements, risks related to marchFIRST's investments in equity securities, risks related to possible acquisitions, competitive factors, integration and other risks related to the merger with USWeb/CKS and possible consequences of stockholder lawsuits against marchFIRST, and risks related to closing the second transaction with divine, Inc. For further information about these and other risks, uncertainties and factors, please review the disclosure included under the caption "Risk Factors" in marchFIRST's Quarterly Report on Form 10-Q for the period ended September 30, 2000 and Annual Report on Form 10-K for the year ended December 31, 1999, as filed with the Securities and Exchange Commission. marchFIRST has not yet established a policy with respect to providing financial forecasts and other forward-looking statements in the future. However, marchFIRST undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or changed circumstances or for any other reason. ### Note to editors: The name marchFIRST is one word, with lowercase march and uppercase FIRST. marchFIRST Contacts: Michael Salvati Chief Financial Officer 312. 361.3003 michael.salvati@marchFIRST.com Sara Cavin 312.361.3012 sara.cavin@marchFIRST.com divine, Inc. Contacts: Investment Professionals Michael Cullinane 630.799.3851 cullinane@divine.com Individual Investors Brenda Lee Johnson 630.799.3858 brendalee@divine.com Media Inquiries Susan Burke 773.394.6746 susan.burke@divine.com EX-99.2 3 a2045523zex-99_2.txt PRESS RELEASE DATED 4/12/01 EXHIBIT 99.2 FOR IMMEDIATE RELEASE APRIL 12, 2001 CHICAGO, ILLINOIS - marchFIRST, Inc. (NASDAQ: MRCH) announced that today it and its domestic subsidiaries and affiliates filed for relief under Chapter 11 of the Federal Bankruptcy Code. The Chapter 11 filing is expected to provide the Company with the time to complete the orderly liquidation of its domestic business units and core assets and to maximize their value. This action is consistent with the Company's prior public disclosure of the Company's general inability to satisfy creditor obligations as they become due, liquidity shortfalls and less than necessary cash reserves. The Company also filed a Chapter 11 plan that essentially provides for distribution of any cash proceeds received by the Company to creditors and, if creditors have been fully paid, to holders of the Company's preferred stock and then holders of its common stock. However, at this time it is unlikely that any proceeds will remain for distribution to holders of the Company's common stock. The Company intends to commence the plan confirmation process shortly. The Company intends to work closely with creditors to recover on all available assets and maximize their value. The Company's European business units were not included as part of the Chapter 11 filing. The Company also announced that today, following the receipt of anti-trust approval, it completed the sale of its SAP practice, VAR business and other assets, (including its interest in BlueVector) to divine, inc., pursuant to the agreement described in the Company's news release on April 2, 2001. As previously disclosed, the purchase price for these business units and assets was $6.25 million at closing, an additional $29.75 million note payable over not more than five years and up to an additional $16 million payable over five years which is contingent on the units' future performance. As described in its April 2, 2001 news release, the Company previously completed an initial transaction with divine, selling divine its Central Region business unit in exchange for $6.25 million at closing, an additional $27.75 million note payable over not more than five years, and up to an additional $39 million payable over five years which is contingent on the units' future performance. The Company has also completed the sale of certain other business units, including McKinney & Silver, Inc. and the Company's Salt Lake City office. The aggregate purchase price for these business units was approximately $13.6 million and the assumption of liabilities of approximately $17.0 million. The Company continues to be in active discussions for the sale of other domestic and foreign business units. The European business units are currently expected to continue to operate in the ordinary course of business. In addition, the Company announced that it does not intend to file with the SEC an Annual Report on Form 10-K for the year ended December 31, 2000 and, for this and other reasons, believes its stock will be delisted from trading on the Nasdaq National Market. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. This news release contains forward-looking statements that reflect marchFIRST's current expectations about its future results, performance, prospects and opportunities. marchFIRST has tried to identify these forward-looking statements by using words such as "believe," "expect," "anticipate," "intend," and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause marchFIRST's actual results, performance, financial condition, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, marchFIRST's ability to complete the orderly liquidation of its business units and core assets and pay its creditors, pursuant to its Chapter 11 plan. For further information other such risks, uncertainties and factors, please review the disclosure included under the caption "Risk Factors" in marchFIRST's Quarterly Report on Form 10-Q for the period ended September 30, 2000 and Annual Report on Form 10-K for the year ended December 31, 1999, as filed with the Securities and Exchange Commission. marchFIRST undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or changed circumstances or for any other reason. marchFIRST Contacts: Investor Relations 312.361.6959 -----END PRIVACY-ENHANCED MESSAGE-----