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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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Date of Report (Date of earliest event reported): November 3, 2003
FTI CONSULTING, INC.
(Exact Name of Registrant as Specified in Charter)
Maryland 001-14875 52-1261113
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
900 Bestgate Road, Suite 1000, Annapolis, Maryland 21401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 224-8770
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 3, 2003, FTI Consulting, Inc. ("FTI") consummated its
previously announced acquisition of KPMG LLP's domestic Dispute Advisory
Services business (the "DAS Business") for $89,125,000 in cash. The purchase
price for the DAS Business was determined on the basis of arm's-length
negotiations between FTI and KPMG, and was financed by FTI out of available cash
on hand.
The acquired assets consist primarily of the client relationships and
books of business of 26 KPMG partners. FTI has assumed responsibility
for completing the engagements managed by the aforementioned KPMG partners and
professionals. In addition to the 26 KPMG partners, approximately 125 other
billable professionals plus support staff joined FTI, and each of the 26
partners, as well as two other members of the DAS Business leadership group,
entered into five-year employment agreements and have become senior managing
directors of FTI. FTI and KPMG have entered into a Transition Services Agreement
to provide for the orderly transfer of such employees from KPMG's offices to
those of DAS.
The Asset Purchase Agreement dated as of October 22, 2003, among KPMG, DAS
Business, LLC, a wholly-owned subsidiary of FTI, and FTI with respect to the
foregoing transactions (the "Asset Purchase Agreement"), contains a four-year
undertaking by KPMG, subject to certain exceptions, that it will not, directly
or indirectly, compete with FTI in the provision of certain services
historically performed by the DAS Business, or acquire any ownership interest in
any firm that engages in a competing business, or market consulting services
using the terms "DAS" or "DAS Services." The Asset Purchase Agreement further
provides that, subject to certain exceptions, (a) KPMG will not, for a period of
five years, hire or otherwise engage any employee of FTI that provides dispute
advisory, litigation support, forensic accounting or investigative services
(including the 26 former KPMG partners and other employees joining
FTI in the acquisition) and (b) FTI will not, for a period of five years, hire
or otherwise engage any partner or employee in KPMG's Investigative and
Integrity Advisory Services business.
A copy of the Asset Purchase Agreement, together with all exhibits thereto
is attached hereto as Exhibit 2.1 and is incorporated herein by reference in its
entirety.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The DAS Business was not a separate reporting unit of KPMG. Accordingly,
separate complete historical financial statements for the DAS Business are not
available and, in FTI's opinion, the preparation of complete separate financial
statements for the DAS Business would require arbitrary allocations of expenses
that would not be meaningful to investors. Accordingly, FTI requested that the
Commission's Staff not object to the presentation of an audited statement of
assets acquired and a statement of operating revenue and expenses directly
related to the DAS Business for the year ended September 30, 2003 in
satisfaction of Rule 3-05 of Regulation S-X,
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as required by Item 7(a) of Form 8-K. In a letter dated November 4, 2003 to
Theodore I. Pincus, Executive Vice President and Chief Financial Officer of FTI,
the Commission agreed not to object to this proposed financial statement
presentation of the DAS Business in satisfaction of Rule 3-05 of Regulation S-X.
At the time of the filing of this Current Report on Form 8-K, the
aforementioned financial statements required by Item 7(a) of Form 8-K were not
yet prepared or available. In accordance with Item 7(a)(4) of Form 8-K an
audited statement of assets acquired and a statement of operating revenue and
expenses directly related to the DAS Business for the year ended September 30,
2003 will be filed by an amendment to this Current Report on Form 8-K not later
than 60 days after the date hereof.
(b) Pro Forma Financial Information.
At the time of the filing of this Current Report on Form 8-K, the pro
forma financial information required by Article 11 of Regulation S-X and Item
7(b) of Form 8-K was not yet prepared or available. In accordance with Item
7(b)(2) of Form 8-K, such pro forma financial information will be filed by an
amendment to this Current Report on Form 8-K not later than 60 days after the
date hereof.
(c) Exhibits.
ExhibitNumber Description
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2.1 Asset Purchase Agreement dated October 22, 2003,
by and among KPMG LLP, DAS Business LLC and FTI
Consulting, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, FTI has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FTI CONSULTING, INC.
Dated: November 13, 2003 By: /s/ Theodore I. Pincus
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Theodore I. Pincus
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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2.1 Asset Purchase Agreement dated as of October 22,
2003 by and among KPMG LLP, DAS Business LLC and
FTI Consulting, Inc. FTI Consulting, Inc. agrees
to furnish supplementally any omitted schedule
to the Commission upon request.