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): August 1, 2001
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LEGG MASON, INC.
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(Exact Name of Registrant as Specified in its Charter)
Maryland 1-8529 52-1200960
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
100 Light Street, Baltimore, Maryland 21202
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code: (410) 539-0000
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Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
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On August 1, 2001, the Registrant acquired all of the ownership
interests in Private Capital Management, L.P. and certain affiliated entities
("PCM") pursuant to a Purchase Agreement, dated as of May 29, 2001 (the
"Purchase Agreement"). PCM is a leading high net worth manager based in Naples,
Florida. The ownership interests in PCM were acquired from its co-founder,
Miles Collier, and its two operating principals: Bruce S. Sherman, who co-
founded the company with Mr. Collier in 1985 and serves as PCM's chairman and
chief executive officer, and Gregg J. Powers, president. The Registrant
generally intends to continue PCM's operations as they were conducted prior to
the acquisition.
The aggregate consideration paid by the Registrant was $682 million in
cash. The Registrant also incurred acquisition costs of approximately $1
million. In addition, the Purchase Agreement provides for the payment of two
contingent cash payments after the third and fifth anniversaries of the closing
based on PCM's revenue growth. The aggregate transaction price payable by the
Registrant is capped at $1.382 billion. The amount of consideration paid was
determined by the Registrant as a result of negotiations between the Registrant
and the sellers, taking into consideration, among other things, the revenue,
profitability and growth rates of PCM.
The Registrant used funds from the following sources in making the
initial payment for PCM: the proceeds of the issuance of the Registrant's Liquid
Yield Option Notes due 2031 on June 6, 2001; the proceeds of the issuance of the
Registrant's 6 3/4% Senior Notes due 2008 on July 2, 2001; and the Registrant's
available cash.
The foregoing summary is qualified by reference to the full text of
the Purchase Agreement, which is included as an exhibit hereto and is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits
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(a) Financial statements of businesses acquired.
(i) Audited Combined Financial Statements of Private Capital
Management, Inc. and Affiliates (A Carve-Out Entity), as of
and for the six months ended June 29, 2000, incorporated
herein by reference to Exhibit 99.1
(ii) Audited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity), as of
and for the six months ended December 31, 2000,
incorporated herein by reference to Exhibit 99.2
(iii) Audited Financial Statements of Carnes Capital Corporation,
as of and for the year ended December 31, 2000,
incorporated herein by reference to Exhibit 99.3
(iv) Unaudited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity) as of
and for the six months ended June 30, 2001, incorporated
herein by reference to Exhibit 99.4
(v) Unaudited Consolidated Financial Statements of Carnes
Capital Corporation and Subsidiary as of and for the six
months ended June 30, 2001, incorporated herein by
reference to Exhibit 99.5
(b) Pro forma combined financial information. The following pro forma
combined financial information is incorporated herein by
reference to Exhibit 99.6
(i) Unaudited Pro Forma Combined Balance Sheet as of June 30,
2001
(ii) Unaudited Pro Forma Combined Statement of Earnings for the
year ended March 31, 2001
(iii) Unaudited Pro Forma Combined Statement of Earnings for the
three months ended June 30, 2001
(iv) Notes to the Unaudited Pro Forma Combined Financial
Statements
(c) Exhibits.
10 Purchase Agreement as of May 29, 2001 by and among Legg
Mason, Inc., Carnes Capital Corporation, Private Capital
Management, L.P., PCM-G.P., Inc., MCC-PCM, Inc., Miles C.
Collier, Bruce S. Sherman, and Gregg J. Powers
(incorporated by reference to Legg Mason's Form 10-Q for
the quarter ended June 30, 2001)
23.1 Consent of PricewaterhouseCoopers LLP, independent
accountants
23.2 Consent of KPMG LLP, independent accountants
99.1 Audited Combined Financial Statements of Private Capital
Management, Inc. and Affiliates (A Carve-Out Entity), as of
and for the six months ended June 29, 2000
99.2 Audited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity), as of
and for the six months ended December 31, 2000
99.3 Audited Financial Statements of Carnes Capital Corporation,
as of and for the year ended December 31, 2000
99.4 Unaudited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity) as of
and for the six months ended June 30, 2001
99.5 Unaudited Consolidated Financial Statements of Carnes
Capital Corporation and Subsidiary as of and for the six
months ended June 30, 2001
99.6 Unaudited Pro Forma Combined Financial Information
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.
LEGG MASON, INC.
Date: August 15, 2001 By: /s/ Robert F. Price
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Robert F. Price
Senior Vice President, General Counsel and
Secretary
EXHIBIT INDEX
Exhibit
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10 Purchase Agreement dated as of May 29, 2001 by and among Legg
Mason, Inc., Carnes Capital Corporation, Private Capital
Management, L.P., PCM-GP, Inc., MCC-PCM, Inc., Miles C. Collier,
Bruce S. Sherman, and Gregg J. Powers (incorporated by reference
to Legg Mason's Form 10-Q for the quarter ended June 30, 2001)
23.1 Consent of PricewaterhouseCoopers LLP, independent accountants
23.2 Consent of KPMG LLP, independent accountants
99.1 Audited Combined Financial Statements of Private Capital
Management, Inc. and Affiliates (A Carve-Out Entity), as of and
for the six months ended June 29, 2000
99.2 Audited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity), as of and
for the six months ended December 31, 2000
99.3 Audited Financial Statements of Carnes Capital Corporation, as of
and for the year ended December 31, 2000
99.4 Unaudited Combined Financial Statements of Private Capital
Management, L.P. and Affiliates (A Carve-Out Entity), as of and
for the six months ended June 30, 2001
99.5 Unaudited Consolidated Financial Statements of Carnes Capital
Corporation and Subsidiary as of and for the six months ended
June 30, 2001
99.6 Unaudited Pro Forma Combined Financial Information