UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): October 2, 2006
ART TECHNOLOGY GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
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| Delaware
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000-26679
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04-3141918 |
| (State or Other Jurisdiction
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(Commission
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(IRS Employer |
| of Incorporation)
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File Number)
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Identification No.) |
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| One Main Street, Cambridge, Massachusetts
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02142 |
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(Zip Code) |
Registrant’s telephone number, including area code: (617) 386-1000
25 First Street, Cambridge, Massachusetts, 02141
(Former Name or 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
Item 2.01 Completion of Acquisition or Disposition of Assets.
On October 2, 2006, we completed our previously announced acquisition of eStara, Inc. The
acquisition was made pursuant to an agreement and plan of merger among us, eStara, our wholly-owned
subsidiaries Arlington Acquisition Corp. and Storrow Acquisition Corp., certain stockholders of
eStara and the stockholder representative named therein, dated September 18, 2006, as amended on
October 2, 2006. The terms of the merger agreement were the result of arm’s-length negotiations
with eStara. As a result of the merger, eStara became our wholly-owned subsidiary.
eStara is a leading provider of proactive conversion solutions for enhancing online sales and
support initiatives. eStara’s Click to Call solution allows an online consumer to request an
immediate call from a salesperson or customer care agent, via the telephone or computer.
We acquired eStara for consideration consisting of approximately 14.6 million shares of common
stock and $3.9 million in cash, as adjusted to reflect the fact that former eStara stockholders who
are not accredited investors will receive all cash, and not ATG shares, in exchange for their
eStara shares. The merger consideration is subject to adjustment based on eStara’s working capital
at closing, which has not yet been determined. In addition, we assumed eStara’s obligation to pay
its employees transaction bonuses of approximately $5.1 million, of which $4.7 million will be paid
in cash and the balance will be paid in the form of ATG stock.
We have also agreed to pay, on or about March 14, 2008, up to an additional $6.0 million in
potential earn-out payments and bonuses based on the eStara revenues for fiscal 2007. These
payments and bonuses may be made, at our option, in the form of cash or stock, subject to the
applicable rules of the Nasdaq stock market and applicable limitations under the tax rules to
permit the transaction to be categorized as a tax free reorganization.
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If the eStara revenue for fiscal 2007 is equal to or greater than $25,000,000 but is
less than $30,000,000, the aggregate earn-out payments and bonuses will be $2,000,000. |
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If the eStara revenue for fiscal 2007 is greater than $30,000,000, the aggregate
earn-out payments and bonuses will be $6,000,000. |
The merger agreement also contains representations, warranties and covenants customary for
transactions of this size and nature. Of the ATG shares and cash issued in the transaction,
approximately 5% will be held in escrow pending any working capital adjustments and an additional
10% will be held in escrow for one year for the purpose of securing amounts that may be payable to
us by the eStara stockholders as a result of indemnification provisions in the agreement.
The shares of our common stock issued at the closing pursuant to the merger are subject to a
lock-up agreement pursuant to which the shares will be released from the lock-up in equal monthly
installments over a period of 12 months, beginning three months after the closing of the merger.
We have agreed to file a registration statement on Form S-3 following the merger, to allow for the
resale of the shares we issued in the transaction.
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Copies of the merger agreement and the amendment to the merger agreement are filed as exhibits
2.1 and 2.2 to this current report and incorporated herein by reference.
Item 9.01 Financial Statement and Exhibits.
(a) Financial Statements of Businesses Acquired.
We intend to file by amendment the required historical financial statements for eStara not
later than 71 calendar days after the date that this Form 8-K must be filed.
(b) Pro Forma Financial Information.
We intend to file by amendment the required pro forma financial statements reflecting the
acquisition of eStara not later than 71 calendar days after the date that this Form 8-K must be
filed.
(d) Exhibits.
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2.1
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Agreement and Plan of Merger dated as of September 18, 2006 by and
among Art Technology Group, Inc., eStara, Inc., Arlington
Acquisition Corp., Storrow Acquisition Corp., and the stockholder
representative and principal stockholders of eStara named therein
(incorporated by reference to Exhibit 10.1 to our current report on
form 8-K filed on September 22, 2006). |
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2.2
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Amendment No. 1 to Agreement and Plan of Merger dated as of October
2, 2006, by and among Art Technology Group, Inc., eStara, Inc. and
the stockholder representative named therein. |
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