- Amended Statement of Beneficial Ownership (SC 13D/A)
September 02 2010 - 8:46AM
Edgar (US Regulatory)
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER
SECTION 14(d)(1)
OR SECTION 13(e)(1)OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment
No. 6)
Health
Grades, Inc.
(Name of Subject Company
(Issuer))
Mountain
Acquisition Corp.
Mountain
Merger Sub Corp.
Vestar
Capital Partners V, L.P.
(Name of Filing Persons
(Offeror))
Common
Stock, Par Value $0.001 Per Share
(Title of Class Securities)
42218Q102
(CUSIP Number of Class of
Securities)
Steven
Della Rocca
Mountain
Acquisition Corp.
c/o Vestar
Capital Partners V, L.P.
245 Park
Avenue, 41st Floor
New York,
New York 10167
(212) 351-1600
(Name, Address and Telephone
Number of Person Authorized to Receive Notices and Communications on Behalf of
Filing Persons)
With a copy to:
Michael
Movsovich
Kirkland &
Ellis LLP
601
Lexington Avenue
New York,
New York 10022
(212) 446-4800
CALCULATION
OF FILING FEE
Transaction Valuation*
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Amount of Filing Fee**
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$294,000,586.00
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$20,962.24
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*
Calculated solely for
purposes of determining the filing fee. The calculation assumes the purchase of
30,534,195 shares of common stock, par value $0.001 per share, at $8.20 per
share. The transaction value also includes the aggregate offer price for
3,688,167 shares issuable pursuant to outstanding options with an exercise
price less than $8.20 per share, which is calculated by multiplying the number
of shares underlying such outstanding options at each exercise price therefor
by an amount equal to $8.20 minus such exercise price. The transaction value
also includes the aggregate net offer price for 125,000 shares issuable
pursuant to a warrant and 1,700,000 shares issuable pursuant to a
confidentiality and non-competition agreement with Mr. Kerry R. Hicks, the
Chief Executive Officer of Health Grades.
**
Calculated in
accordance with Exchange Act Rule 0-11 by multiplying the transaction
value by 0.0000713.
x
Check the box
if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid. Identify
the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid:
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$20,962.24
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Filing Party:
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Mountain Acquisition Corp.
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Form or Registration
No.:
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Schedule TO
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Date Filed:
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August 10, 2010
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o
Check the box
if the filing relates solely to preliminary communications made before the
commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
x
third-party tender offer
subject to Rule 14d-1.
o
issuer tender
offer subject to Rule 13e-4.
o
going-private
transaction subject to Rule 13e-3.
x
amendment to
Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer:
o
If applicable, check the appropriate box(es) below
to designate the appropriate rule provision(s) relied upon:
o
Rule 13e-4(i) (Cross-Border
Issuer Tender Offer).
o
Rule 14d-1(d) (Cross-Border
Third-Party Tender Offer).
This Amendment No. 6 to the Tender Offer Statement on
Schedule TO (the Schedule TO) amends and supplements the
Schedule TO relating to the tender offer by Mountain Merger Sub Corp., a
Delaware corporation (Purchaser) and a direct wholly-owned subsidiary of
Mountain Acquisition Corp., a Delaware corporation (Parent), for all of the
outstanding common stock, par value $0.001 per share (the Shares), of Health
Grades, Inc., a Delaware corporation (Health Grades), at a price of $8.20
per share net to the seller in cash without interest and less any required
withholding taxes, if any, upon the terms and conditions set forth in the offer
to purchase dated August 10, 2010 (the Offer to Purchase), a copy of
which is attached as Exhibit (a)(1)(A), and in the related letter of
transmittal (the Letter of Transmittal), a copy of which is attached as
Exhibit (a)(1)(B), which, together with any amendments or supplements,
collectively constitute the Offer.
Items 1 through 9 and 11
Items
1 through 9 and Item 11 of the Schedule TO, which incorporate by reference the
information contained in the Offer to Purchase, are hereby revised as follows:
(1) The response to the question Do you have the financial
resources to pay for all of the Shares that you are offering to purchase in the
Offer? on page 2 of the Summary Term Sheet in the Offer to Purchase and
the second paragraph in Section 9 Source and Amount of Funds on page 23
of the Offer to Purchase, is amended and restated to read as follows:
All
Shares tendered into the Offer and accepted by Purchaser will be paid for
promptly. Parent and Purchaser estimate that the total amount of funds required
(i) to purchase all outstanding Shares pursuant to the Offer and the
Merger and (ii) to pay for the cash-out of all derivative securities,
including warrants, options, convertible or exchangeable securities or other
rights to acquire Shares, of Health Grades required to be cashed out by the
Merger Agreement, will be approximately $294 million.
Vestar
has contractual arrangements with its limited partners pursuant to which its
limited partners are committed to investing a specified amount of equity
capital and transferring such capital to Vestar and its affiliates within 10
business days of receiving a capital call notice from Vestar or its affiliates.
In connection with its plans to purchase the Shares pursuant to the Offer,
Vestar has issued a capital call notice to its limited partners in an aggregate
amount sufficient to pay for 97% of all outstanding Shares. Vestar expects to receive these funds to fund
the Offer on or before September 10, 2010. In the event that more than
approximately 97% of the Shares are tendered into the Offer, Vestar will draw
on a credit line it maintains in an amount sufficient to pay for any such
tendered Shares.
Vestar
has provided Parent with an equity commitment letter pursuant to which Vestar
has agreed to fund the entire purchase price of the Shares with its own
capital, as described above. Health Grades is a third party beneficiary to the
equity commitment letter. Vestar may allocate a portion of its equity
commitment to limited partners of Vestar and certain other co-investors,
provided that such allocation will not limit the obligations of Vestar under the
equity commitment letter to the extent any such limited partner or co-investor
fails to purchase the equity allocated to it. The terms and conditions of any
such investment would be subject to negotiations and discussions among Vestar
and the potential investors. In addition, Holdings, Parent and/or Purchaser may
enter into debt financing arrangements prior to the purchase of the Shares and
the consummation of the Merger, the proceeds of which financing may reduce the
amount required to be contributed by Vestar Capital Partners V, L.P. under the
equity commitment letter. However, the Offer is not conditional upon Holdings,
Parent and/or Purchaser obtaining third party debt financing, and the failure
to obtain third party debt financing has no bearing on Vestars commitment to
provide the necessary funds pursuant to such equity commitment letter. A copy
of the equity commitment letter has been filed as Exhibit (b)(1) to
the Schedule TO, which is incorporated herein by reference.
Vestar
will contribute funds required to pay for all Shares tendered into the Offer
and accepted for payment to Holdings, which will contribute the funds to
Parent, which Parent will contribute the funds to Purchaser. Purchaser will use the contributed funds to
purchase the Shares pursuant to the Offer.
Credit Line
. On November 9,
2007, Vestar and certain affiliated funds entered into a Loan and Security
Credit Agreement for a $25.0 million revolving line of credit. The line of
credit has an 18-month term which can be renewed. The current term of the line of credit will
complete on September 7, 2011 unless further renewed. Interest on the line
of credit is payable at a rate of prime minus 1%. As of August 31, 2010,
there was no outstanding balance on the line of credit. A copy of the Loan and Security Agreement has
been filed as Exhibit (b)(2) to the Schedule TO, which is
incorporated herein by reference.
2
SIGNATURES
After due inquiry and to the best of their knowledge and belief, each
of the undersigned certifies that the information set forth in this statement
is true, complete and correct.
Dated: September 1, 2010
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MOUNTAIN
MERGER SUB CORP.
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By:
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/s/ STEVEN DELLA ROCCA
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Name:
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Steven Della Rocca
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Title:
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Secretary
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MOUNTAIN
ACQUISITION CORP.
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By:
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/s/ STEVEN DELLA ROCCA
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Name:
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Steven Della Rocca
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Title:
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Secretary
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VESTAR
CAPITAL PARTNERS V, L.P.
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By: Vestar Associates
V, L.P.,
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its General Partner
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By: Vestar Managers
V Ltd.,
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its General Partner
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By:
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/s/ BRIAN P. SCHWARTZ
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Name:
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Brian P. Schwartz
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Title:
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Authorized Signatory
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3
EXHIBIT INDEX
(a)(1)(A)
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Offer to Purchase, dated
August 10, 2010.*
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(a)(1)(B)
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Letter of Transmittal.*
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(a)(1)(C)
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Notice of Guaranteed
Delivery.*
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(a)(1)(D)
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Letter from the
Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.*
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(a)(1)(E)
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Letter to Clients for Use
by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.*
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(a)(1)(F)
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Joint Press Release of
Health Grades, Inc. and Vestar Capital Partners V, L.P., dated
July 28, 2010 (incorporated by reference to Exhibit 99.1 to the
Schedule TO-C filed by Mountain Merger Sub Corp. with the Securities and
Exchange Commission on July 29, 2010).*
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(a)(1)(G)
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Summary Advertisement as
published on August 10, 2010.*
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(a)(5)
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Class Action
Complaint and Jury Demand dated July 30, 2010 (Reginald W. Harris v.
Vestar Capital Partners V, L.P. et al.).*
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(a)(6)
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Class Action
Complaint and Jury Demand dated August 4, 2010 (Medford Bragg v. Vestar
Capital Partners V, L.P. et al.).*
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(a)(7)
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Press Release of
Affiliates of Vestar Capital Partners V, L.P., dated August 10,
2010.*
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(a)(8)
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Verified Class Action
Complaint dated August 12, 2010 (Tove Forgo v. Health Grades, Inc.
et. al.).*
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(a)(9)
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Verified Class Action
Complaint for Breach of Fiduciary Duty dated August 16, 2010
(Peter P. Weigard v. Kerry Hicks, et. al.).*
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(a)(10)
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Shareholder
Class Action Complaint and Jury Demand dated August 17, 2010
(Sarah E. Tomsky v. Health Grades, Inc., et. al.).*
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(b)(1)
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Equity Financing
Commitment, dated July 27, 2010.*
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(b)(2)
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Loan and Security
Agreement, dated November 9, 2007.
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(d)(1)
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Agreement and Plan of
Merger, dated as of July 27, 2010, by and among Mountain Acquisition
Corp., Mountain Merger Sub Corp., Mountain Acquisition Holdings, LLC and
Health Grades, Inc. (incorporated by reference to Exhibit 2.1 to
the Form 8-K filed by Health Grades, Inc. with the Securities and
Exchange Commission on July 28, 2010).*
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(d)(2)
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Amendment to the Agreement
and Plan of Merger, dated as of August 9, 2010, by and among Mountain
Acquisition Corp., Mountain Merger Sub Corp., Mountain Acquisition
Holdings, LLC and Health Grades, Inc. (incorporated by reference to
Exhibit 2.1 to the Form 8-K filed by Health Grades, Inc. with
the Securities and Exchange Commission on August 9, 2010).*
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*
Previously filed.
4
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