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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
Date of Report (Date of Earliest Event Reported): September 13, 2000
FREQUENCY ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-8061 11-1986657
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
55 Charles Lindbergh Blvd., Mitchel Field, NY 11553
(Address of principal executive offices) (Zip Code)
(516) 794-4500
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report)
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Page 1 of 5 pages
Item 2. Acquisition or Disposition of Assets.
On September 13, 2000, Frequency Electronics, Inc., a Delaware corporation
(the "Registrant") completed its acquisition (the "Acquisition") of
substantially all of the outstanding shares of Gillam S.A. ("Gillam"), a
privately-held company organized under the laws of Belgium. Gillam's business
(the "Gillam Business") is based in the telecommunications market and targeted
to four main fields: (i) "Network Synchronization"--managing timing and
interconnectivity for communication networks; (ii) "Remote Control"--consisting
of network monitoring systems; (iii) "Rural Telephony"--equipment designed to
connect isolated subscribers to a telephone network via satellite and (iv)
"Power Supplies" --produced through a subsidiary, for telecom service providers.
The Registrant intends to continue operating the Gillam Business, focusing on
those fields which are expected to generate the greatest long-term returns and
which are most closely associated with Gillam's core technologies. Registrant
expects Gillam to play a significant role in introducing Registrant's
communications products into European markets.
The Acquisition was consummated pursuant to the terms of a Share Purchase
Agreement dated as of August 29, 2000 (the "Share Purchase Agreement"). The
Registrant acquired an aggregate of 709,212 common shares (out of a total of
709,212 shares outstanding) of Gillam (the "Gillam Shares") from the
shareholders of Gillam. In consideration of the Gillam Shares, the Registrant
paid to the Gillam shareholders an aggregate of $8,400,264 in cash and 154,681
shares of Registrant's common stock ("FEI Common Stock"), par value $1.00 per
share (collectively, the "Purchase Price"). The FEI Common Stock issued to the
Shareholders are restricted securities under the federal securities laws. Under
the Share Purchase Agreement, based upon the market value of the FEI Common
Stock on July 25, 2002, Registrant may be required to issue to the Shareholders
up to 35,000 additional shares of FEI Common Stock. The Purchase Price was
determined by negotiation among the parties. The Registrant financed the cash
component of the Purchase Price from its working capital. The press release of
the Registrant, attached hereto as Exhibit 99.1, announcing the transaction is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The Registrant will file the required financial statements of Gillam on
or before 60 days after the date hereof.
(c) Exhibits.
99.1 Press Release of the Registrant dated August 30, 2000
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.
Frequency Electronics, Inc.
By: /s/ Alan Miller
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Date: September 28, 2000 Alan Miller
Treasurer and Chief Financial Officer
Exhibit 99.1
General Joseph P. Franklin
55 Charles Lindbergh Boulevard
Mitchel Field, NY 11553
Telephone: (516) 794-4500
August 30, 2000
PRESS RELEASE
Frequency Electronics, Inc. to Acquire Gillam, S.A. - A Leading
Belgian Wireline Telecom Synchronization Products Company
Frequency Electronics, Inc. (AMEX:FEI) announced today that it has signed a
definitive agreement to purchase Gillam, S.A., a privately-held Belgian company
which develops and manufactures wireline telecom synchronization, network
monitoring, and power supply products with principal offices and facilities
located in Liege, Belgium. FEI will pay approximately $8.5 million in cash and
200,000 shares of FEI stock for the stock of Gillam. The transaction is expected
to close within 30 days.
Gillam's consolidated revenues for the 12 months ended March 31, 2000, were
approximately $16 million. The pro-forma combined revenues of both companies for
the same period were approximately $43 million. The purchase of Gillam is
expected to be accretive to FEI's earnings. The transaction includes the
purchase of Gillam's main Belgian facility and corporate headquarters, a
manufacturing and service facility in Chalon-sur-Saone, France, as well as a
minority holding in a similar operation in Pinhal Novo, Portugal.
"We are very pleased to join forces with Gillam, S.A., a highly-respected
European manufacturer of products that are synergistic with our own," stated
Frequency Chairman Joseph Franklin. "This will allow us to offer connectivity
solutions between wireless and wireline networks, and will give FEI a strong
entry into the European markets. Gillam's wireline synchronization, monitoring,
and instrumentation systems will be added to FEI's world-leading wireless
product lines. Gillam's current management, with more than 15 years of industry
experience, will remain in place and will play an important role in
significantly increasing our share of the rapidly growing global telecom
markets."
Michel Gillard, Gillam's President, stated, "In Frequency Electronics, we have
found an ideal partner for the expansion of our business. Frequency's worldwide
leadership position and unique technologies, specifically precision quartz,
rubidium, and cesium will greatly augment Gillam's capabilities. I believe this
transaction will prove to be a great step forward for Gillam-FEI, as our new
company will be known, and is in the best interests of Gillam's customers,
shareholders and employees."
Exhibit 99.1
TM Capital Corp., a New York based investment banking firm, served as financial
advisor to Frequency Electronics, Inc. in connection with this transaction.
Frequency Electronics, Inc. is a world leader in the design, development and
manufacture of high-technology frequency, timing and synchronization products
for satellite and terrestrial voice, video and data telecommunications. The
Company's technologies provide unique solutions that are essential building
blocks for the next generation of broadband wireless and fiber optic
communications systems, and for the ongoing expansion of existing wireless and
wireline networks. Additional information is available on FEI's website:
www.frequencyelectronics.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: The Statements in this press release regarding future earnings and
operations and other statements relating to the future constitute
"forward-looking" statements pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
inherently involve risks and uncertainties that could cause actual results to
differ materially from the forward-looking statements. Factors that would cause
or contribute to such differences include, but are not limited to, ability to
integrate operations and personnel, actions by significant customers or
competitors, general domestic and international economic conditions, consumer
spending trends, reliance on key customers, continued acceptance of the
Company's products in the marketplace, competitive factors, new products and
technological changes, product prices and raw material costs, dependence upon
third-party vendors, competitive developments, changes in manufacturing and
transportation costs, the availability of capital, and other risks detailed in
the Company's periodic report filings with the Securities and Exchange
Commission. By making these forward-looking statements, the Company undertakes
no obligation to update these statements for revisions or changes after the date
of this release.