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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
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OCTOBER 15, 2001 (OCTOBER 1, 2001)
(DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED))
CENDANT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-10308 06-0918165
(STATE OR OTHER JURISDICTION (COMMISSION FILE NO.) (I.R.S. EMPLOYER
OF INCORPORATION OR IDENTIFICATION NUMBER)
ORGANIZATION)
9 WEST 57TH STREET
NEW YORK, NY 10019
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICE)
(212) 413-1800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
GALILEO ACQUISITION. On October 1, 2001, Cendant Corporation, a Delaware
corporation (the "Company"), acquired all of the issued and outstanding shares
of common stock, par value $.01 per share (the "Galileo Common Stock"), of
Galileo International, Inc., a Delaware corporation ("Galileo"), pursuant to the
Agreement and Plan of Merger, dated as of June 15, 2001 (the "Merger
Agreement"), by and among the Company, Galaxy Acquisition Corp., a Delaware
corporation and direct, wholly owned subsidiary of the Company (the "Merger
Sub"), and Galileo. Pursuant to the Merger Agreement, Merger Sub was merged with
and into Galileo (the "Merger"), with Galileo continuing as the surviving
corporation and becoming a direct, wholly owned subsidiary of the Company. As a
result of the Merger, the Galileo Common Stock has been deregistered under the
Securities Act of 1933, as amended, and delisted from the New York Stock
Exchange.
Upon the consummation of the Merger, each share of Galileo Common Stock issued
and outstanding was converted into the right to receive approximately $4.08 in
cash, without interest thereon, and 1.328 shares of common stock, par value $.01
per share, designated as CD common stock (the "CD Common Stock") (other than (i)
shares of Galileo Common Stock held by stockholders who perfect their appraisal
rights under the DGCL, (ii) each share of Galileo Common Stock held in Galileo's
treasury, which were cancelled and retired without payment therefore and (iii)
each share of Galileo Common Stock owned by the Company or any subsidiary of the
Company, which were cancelled and retired without payment therefore). The
aggregate cash and CD Common Stock paid to the former stockholders of Galileo in
respect of their shares of Galileo Common Stock was equal to approximately $1.8
billion. Cendant also assumed approximately $575 million of Galileo net debt at
closing of which $540 million was repaid. In addition, pursuant to the Merger
Agreement, holders of options to purchase shares of Galileo Common Stock were
entitled, upon consummation of the Merger, to convert their options into options
to purchase shares of CD Common Stock with approximately the same value. As a
result, the former option holders of Galileo received from the Company options
to purchase approximately 6,070,342 shares of CD Common Stock.
SOURCE AND AMOUNT OF FUNDS. The Company used approximately $900 million of
available cash on hand (i) to pay to Galileo stockholders the cash portion of
the merger consideration and (ii) to retire $540 million of Galileo's net debt.
CERTAIN RELATIONS BETWEEN CENDANT AND GALILEO. On July 19, 2001, Travel Portal,
Inc., an affiliate of the Company ("Travel Portal"), signed an agreement with
Galileo whereby TRIP.com, a subsidiary of Galileo, will provide consulting
services, technology expertise and functionality for the development of Travel
Portal's travel website. Travel Portal will relaunch a new site under the
TRIP.com brand during the fourth quarter of 2001.
Galileo is a diversified, global technology leader. Its core business is
providing electronic global distribution services for the travel industry
through its computerized reservation systems, leading-edge products and
innovative Internet-based solutions. Galileo is a value-added distributor of
travel inventory dedicated to supporting its travel agency and corporate
customers and, through them, expanding traveler choice. Among Galileo's
subsidiaries are TRIP.com, an award-winning online travel service and technology
provider; and Quantitude, which delivers advanced telecommunications services
and enterprise networking solutions. Galileo also offers secure, flexible and
cost-effective managed hosting services.
See Exhibits 99.1, 99.2 and 99.3 for the financial statements of Galileo and
proforma financial information giving effect to the acquisition.
ITEM 5. OTHER EVENTS
CREDIT FACILITY. On October 8, 2001, the Company announced that it had completed
a $1.15 billion revolving credit facility with a banking group led by J.P.
Morgan Chase. Copies of the Amended and Restated Credit Agreement and the press
release announcing the completion of the credit facility are attached as
Exhibits 10.1 and 99.4, respectively, to this Form 8-K and are incorporated by
reference herein.
FORWARD-LOOKING STATEMENTS. Attached hereto as Exhibit 99.5 is a Note Regarding
Forward-Looking Statements which may be made by the Company in its public
filings and other public statements and includes important factors and
assumptions which could cause actual results to differ materially from those
expressed in such forward-looking statements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
See Exhibit 99.1 attached hereto for the Audited Financial Statements
of Galileo as of December 31, 2000 and 1999 and for each of the years
in the three-year period ended December 31, 2000.
See Exhibit 99.2 Attached hereto for the Unaudited Financial Statements
of Galileo as of June 30, 2001 and for the six months ended June 30,
2001 and 2000.
The financial statements of Avis Group Holdings, Inc. are incorporated
by reference from Avis' Annual Report on Form 10-K for the year ended
December 31, 2000 and Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 2001, previously filed with the Commission on
March 28, 2001 and August 14, 2001, respectively.
(b) PRO FORMA FINANCIAL INFORMATION.
See Exhibit 99.3 attached hereto for Pro Forma Financial Information
giving effect to the acquisition of Galileo, the March 1, 2001
acquisition of Avis and various finance-related activities which
occurred during the first and second quarters of 2001.
(c) EXHIBITS.
See Exhibit Index.
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.
CENDANT CORPORATION
/s/ KEVIN M. SHEEHAN
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Kevin M. Sheehan
Senior Executive Vice President and
Chief Financial Officer
/s/ TOBIA IPPOLITO
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Tobia Ippolito
Executive Vice President, Finance and
Chief Accounting Officer
Date: October 15, 2001
CENDANT CORPORATION
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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2.1 Agreement and Plan of Merger by and among Cendant Corporation, Galaxy
Acquisition Corp. and Galileo International, Inc., dated as of June 15,
2001 (incorporated by reference from Exhibit 2.1 to the Company's
Registration Statement on Form S-4 filed on July 6, 2001).
10.1 Amended and Restated Credit Agreement by and among Cendant Corporation,
the Chase Manhattan Bank, Bank of America, N.A., the Bank of Nova
Scotia and Credit Lyonnais New York Branch, dated as of October 5,
2001.
23.1 Consent of KPMG LLP, relating to Galileo International, Inc.
99.1 Audited Financial Statements of Galileo International, Inc. as of
December 31, 2000 and 1999 and for each of the years in the three-year
period ended December 31, 2000.
99.2 Unaudited Financial Statements of Galileo International, Inc. as of
June 30, 2001 and for the six months ended June 30, 2001 and 2000.
99.3 Pro Forma Financial Information (unaudited).
99.4 Press Release issued by Cendant Corporation on October 8, 2001
announcing the completion of the credit facility referred to in Exhibit
10.1 above.
99.5 Note Regarding Forward-Looking Statements