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): May 1, 2009
VERISIGN, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation)
| 000-23593 | 94-3221585 | |
| (Commission File Number) |
(IRS Employer Identification No.) | |
| 487 East Middlefield Road, Mountain View, CA |
94043 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
(650) 961-7500
(Registrant’s Telephone Number, Including Area Code)
(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:
| ¨ | 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 May 1, 2009, VeriSign, Inc. (the “Company”) entered into a letter agreement (the “Amendment”) amending and clarifying certain terms of the asset purchase agreement entered into on March 2, 2009 (the “Agreement”) between the Company and Transaction Network Services, Inc., a Delaware corporation, (the “Purchaser”) for the sale of the Company’s Communications Services business. In addition to certain other terms, pursuant to the Amendment, the Purchaser shall have the right, for certain limited purposes and for a limited time following the closing of the sale of the Communications Services business, to use the “VeriSign” name and certain other trademarks, trade names, logos and other service marks of VeriSign, Inc. and its retained subsidiaries. The Purchaser has the limited right to use the aforementioned trademarks and logos royalty-free, worldwide and on a non-exclusive basis for certain defined periods ranging from 30 days to up to twelve months following the closing while the Purchaser re-brands products and services related to the Communications Services business.
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
On March 2, 2009, the Company entered into the Agreement with the Purchaser for the sale of its Communications Services business for cash consideration of $230.0 million, subject to certain adjustments to reflect normal fluctuations in working capital. On May 1, 2009, the Company completed the sale of its Communications Services business to the Purchaser pursuant to the Agreement for cash proceeds of $226.2 million, after certain initial adjustments to reflect the parties’ current estimate of working capital associated with the Communications Services business as of the closing date. The transaction will be subject to a final adjustment to reflect the actual working capital balance as of the closing date. The Communications Services business provided managed solutions to fixed line, broadband, mobile operators and enterprise customers through integrated communications and commerce platforms.
Pursuant to the Agreement, the Purchaser acquired various assets associated with the Communications Services business, including (i) customer and vendor contracts, (ii) ownership of or the right to use intellectual property required for the conduct of the business, (iii) various trademark registrations and patents, (iv) office furniture, computers, servers and other equipment, (v) real property located in Lacey, Washington, (vi) the right to leases in locations throughout the United States, and (vii) certain current assets. The Purchaser has acquired a limited right to use the “VeriSign” name and certain other trademarks, trade names, logos and other service marks of VeriSign, Inc. and its retained subsidiaries, as described above. Certain employees of the Communications Services business have become employees of the Purchaser. Payments to Communications Services business employees covered by change-in-control agreements, if any, will be paid by the Purchaser, and reimbursed by the Company. The Company has previously disclosed additional information concerning the Agreement on the Current Report on Form 8-K, filed with the Securities and Exchange Commission on March 6, 2009.
| Item 9.01. | Financial Statements and Exhibits. |
(b)(1) Pro forma financial information
The pro forma financial information required by this item is attached as Exhibit 99.1 to this report.
2
| (d) | Exhibits |
| Exhibit Number |
Description | |
| 99.1 | Pro forma financial information | |
3
SIGNATURE
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.
| VERISIGN, INC. | ||||||
| Date: May 7, 2009 | By: | /s/ Richard H. Goshorn | ||||
| Name: | Richard H. Goshorn | |||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||
4
Exhibit 99.1
VERISIGN, INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL STATEMENT INFORMATION
(Unaudited)
On March 2, 2009, VeriSign, Inc. (the “Company”) entered into an asset purchase agreement (the “Agreement”) with Transaction Network Services, Inc., a Delaware corporation (the “Purchaser”) for the sale of its Communications Services (“Communications”) business for cash consideration of $230.0 million, subject to certain adjustments to reflect normal fluctuations in working capital. On May 1, 2009, the divestiture transaction was completed for cash proceeds of $226.2 million after certain initial adjustments to reflect the parties’ current estimate of working capital associated with the Communications Services business as of the closing date. The divestiture transaction will be subject to a final adjustment to reflect the actual working capital balances as of the closing date.
The unaudited Pro Forma Condensed Consolidated Balance Sheet Information as of December 31, 2008 set forth below has been presented after giving effect to the Communications business divestiture transaction as if it had occurred on December 31, 2008. The Company has not presented the unaudited Pro Forma Condensed Consolidated Statement of Operations information because the Communications business was reported as discontinued operations in the Company’s fiscal 2008 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 3, 2009.
The unaudited pro forma financial statement information presented herein has been derived primarily from the historical audited consolidated financial statements of the Company included in its fiscal 2008 Annual Report on Form 10-K.
The unaudited pro forma financial statement information presented herein has been provided for informational purposes and should not be considered indicative of the financial condition or results of operations that would have been achieved had the divestiture occurred as of the periods presented. In addition, the unaudited pro forma financial statement information presented herein does not purport to indicate balance sheet data or results of operations as of any future date or for any future period. The unaudited pro forma financial statement information presented herein, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its fiscal 2008 Annual Report on Form 10-K.
VERISIGN, INC. AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
(Unaudited)
| December 31, 2008 | ||||||||||||
| As Reported (1) | Communications Services Divestiture |
Pro Forma | ||||||||||
| ASSETS | ||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 789,068 | $ | 226,196 | (2) | $ | 1,015,264 | |||||
| Accounts receivable, net of allowance for doubtful accounts of $1,208 at December 31, 2008 |
83,749 | — | 83,749 | |||||||||
| Prepaid expenses and other current assets |
268,178 | (1,238 | ) | 266,940 | ||||||||
| Assets held for sale |
483,840 | (236,199 | ) | 247,641 | ||||||||
| Total current assets |
1,624,835 | (11,241 | ) | 1,613,594 | ||||||||
| Property and equipment, net |
382,241 | — | 382,241 | |||||||||
| Goodwill |
283,109 | — | 283,109 | |||||||||
| Other intangible assets, net |
35,312 | — | 35,312 | |||||||||
| Restricted cash |
1,858 | — | 1,858 | |||||||||
| Other assets |
245,877 | (65 | ) | 245,812 | ||||||||
| Total long-term assets |
948,397 | (65 | ) | 948,332 | ||||||||
| Total assets |
$ | 2,573,232 | $ | (11,306 | ) | $ | 2,561,926 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable and accrued liabilities |
$ | 263,535 | $ | (8,193 | ) | $ | 255,342 | |||||
| Accrued restructuring costs |
28,920 | — | 28,920 | |||||||||
| Deferred revenues |
629,800 | — | 629,800 | |||||||||
| Deferred tax liabilities |
5,463 | — | 5,463 | |||||||||
| Liabilities related to assets held for sale |
49,160 | (12,182 | ) | 36,978 | ||||||||
| Total current liabilities |
976,878 | (20,375 | ) | 956,503 | ||||||||
| Long-term deferred revenues |
215,281 | — | 215,281 | |||||||||
| Long-term accrued restructuring costs |
3,037 | — | 3,037 | |||||||||
| Convertible debentures |
1,261,655 | — | 1,261,655 | |||||||||
| Long-term tax liability |
16,378 | — | 16,378 | |||||||||
| Total long-term liabilities |
1,496,351 | — | 1,496,351 | |||||||||
| Total liabilities |
2,473,229 | (20,375 | ) | 2,452,854 | ||||||||
| Commitments and contingencies |
||||||||||||
| Minority interest in subsidiaries |
49,208 | — | 49,208 | |||||||||
| Stockholders’ equity: |
||||||||||||
| Preferred stock—par value $.001 per share Authorized shares: 5,000,000 |
||||||||||||
| Issued and outstanding shares: none |
— | — | — | |||||||||
| Common stock—par value $.001 per share Authorized shares: 1,000,000,000 |
||||||||||||
| Issued and outstanding shares: 191,547,795 excluding 112,717,587 held in treasury, at December 31, 2008 |
304 | — | 304 | |||||||||
| Additional paid-in capital |
21,472,895 | — | 21,472,895 | |||||||||
| Accumulated deficit |
(21,439,410 | ) | 9,069 | (21,430,341 | ) | |||||||
| Accumulated other comprehensive income |
17,006 | — | 17,006 | |||||||||
| Total stockholders’ equity |
50,795 | 9,069 | 59,864 | |||||||||
| Total liabilities and stockholders’ equity |
$ | 2,573,232 | $ | (11,306 | ) | $ | 2,561,926 | |||||
| (1) | As reported in the Company’s fiscal 2008 Annual Report on Form 10-K. |
| (2) | Represents cash proceeds received, less estimated transaction costs incurred in connection with the divestiture. |