.
.
.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(D)(1) OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
----------
APPLIED GRAPHICS TECHNOLOGIES, INC.
(Name Of Subject Company (Issuer))
----------
KAGT HOLDINGS, INC.
KAGT ACQUISITION CORP.
KOHLBERG INVESTORS IV, L.P.
KOHLBERG TE INVESTORS IV, L.P.
KOHLBERG OFFSHORE INVESTORS IV, L.P.
KOHLBERG PARTNERS IV, L.P.
(Names of Filing Persons (Offerors))
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
037937208
(CUSIP Number of Class of Securities)
----------
Mr. Christopher Lacovara
KAGT Acquisition Corp.
c/o Kohlberg & Company
111 Radio Circle
Mt. Kisco, NY 10549
Telephone: (914) 241-7430
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of filing persons)
----------
COPIES TO:
Daniel S. Evans, Esq.
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110
Telephone: (617) 951-7000
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount Of Filing Fee**
--------------------------------------------------------------------------------
$8,559,980.25 $692.50
================================================================================
* Estimated solely for purposes of calculating amount of filing fee in
accordance with Rule 0-11(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The transaction value is based upon
10,070,565 shares of outstanding Common Stock, par value $.01 per share of
the Subject Company as of May 31, 2003 and the expected merger
consideration of $0.85 per share. Such outstanding shares assumes the
exercise of 923,000 options, all outstanding in-the-money options to
purchase shares of Common Stock of the Subject Company which are
exercisable in connection with the transaction.
** In accordance with Exchange Act Rule 0-11(c) and Fee Rate Advisory #11 for
fiscal year 2003, the filing fee was determined by calculating a fee of
$80.90 per $1,000,000 of the aggregate transaction consideration of
$8,559,980.25.
[ ] 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: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
[ ] Check the box if the filing relates 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.
[ ] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] 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: [ ]
================================================================================
This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to
a tender offer by KAGT Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of KAGT Holdings, Inc., a Delaware
corporation ("Parent"), to purchase all the outstanding shares of Common Stock,
par value $0.01 per share (the "Shares"), of Applied Graphics Technologies,
Inc., a Delaware corporation (the "Company"), at a purchase price of $0.85 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated June 20, 2003
(the "Offer to Purchase"), and in the related Letter of Transmittal (the "Letter
of Transmittal" which, together with the Offer to Purchase, as each may be
amended and supplemented from time to time, constitute the "Offer"). This
Schedule TO is being filed on behalf of the Purchaser and Parent. By virtue of
its direct or indirect relationship with Parent and the Purchaser, each of
Kohlberg Investors IV, L.P., Kohlberg TE Investors IV, L.P., Kohlberg Offshore
Investors IV, L.P. and Kohlberg Partners IV, L.P. (collectively, "Kohlberg Fund
IV") may be deemed to be bidders within the meaning of Rule 14d-1(g)(2) under
the Securities Exchange Act of 1934, as amended, and as such are joining with
Purchaser and Parent as filing persons with respect to this Schedule TO.
The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are filed with this Schedule TO as Exhibits (a)(1)
and (a)(2) hereto, respectively, are incorporated by reference in answers to
Items 1 through 9 and Item 11 of this Schedule TO, and is supplemented by the
information specifically provided herein.
ITEM 1. SUMMARY TERM SHEET
The information set forth in the "SUMMARY TERM SHEET" of the Offer to
Purchase is incorporated by reference.
ITEM 2. SUBJECT COMPANY INFORMATION
(a) The name of the subject company is Applied Graphics Technologies,
Inc., and the address of its principal executive offices is 450 West 33rd
Street, New York, New York 10001. The telephone number at such location is (212)
716-6600.
(b) The information set forth in "INTRODUCTION" of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in "Section 6--Price Range of the Shares;
Dividends on the Shares" of the Offer to Purchase is incorporated herein by
reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
(a), (b), (c)(1) and (c)(2) The information set forth in "Section
9--Certain Information Concerning Parent and the Purchaser" and "Annex I:
Directors and Executive Officers of Parent, the Purchaser, Kohlberg Investors
IV, Kohlberg TE Investors IV, Kohlberg Offshore Investors IV, Kohlberg Partners
IV and Kohlberg Management IV, L.L.C." of the Offer to Purchase is incorporated
herein by reference.
(c)(3) To the best knowledge of Purchaser, Parent and Kohlberg Fund IV,
none of Purchaser, Parent or Kohlberg Fund IV, nor any person listed in Annex I
of the Offer to Purchase has, during the past five years, been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors).
(c)(4) To the best knowledge of Purchaser, Parent and Kohlberg Fund IV,
none of Purchaser, Parent or Kohlberg Fund IV, nor any person listed in Annex I
of the Offer to Purchase has, during the past five years, been a party to any
judicial or administrative proceeding (except for matters that were dismissed
without sanction or settlement) that resulted in a judgment, decree or final
order enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in "Section 1--Terms of the Offer" and "Section
12--Purpose of the Offer; the Merger Agreement; Other Recapitalization
Arrangements; Plans for the Company," "Section 3--Withdrawal Rights," "Section
4--Acceptance for Payment and Payment" and "Section 5--Certain U.S. Federal
Income Tax Consequences" of the Offer to Purchase is incorporated
herein by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
(a)(1) Other than the transactions described in Item 5(b) below, neither
Purchaser, Parent, Kohlberg Fund IV nor, to the best knowledge of Purchaser,
Parent or Kohlberg Fund IV, any of the persons listed in Annex I of the Offer to
Purchase have entered into any transaction with the Company, or any of the
Company's affiliates which are not natural persons during the past two years.
(a)(2) Other than the transactions described in Item 5(b) below, neither
Purchaser, Parent, Kohlberg Fund IV nor, to the best knowledge of Purchaser,
Parent or Kohlberg Fund IV, any of the persons listed in Annex I of the Offer to
Purchase have entered into any transaction with any executive officer, director
or affiliate of the subject company that is a natural person with an aggregate
value that exceeds $60,000 during the past two years.
(b) The information set forth in the "INTRODUCTION," "Section 9--Certain
Information Concerning Parent and Purchaser," "Section 11--Contacts and
Transactions with the Company; Background of the Offer," and "Section
12--Purpose of the Offer; the Merger Agreement; Other Recapitalization
Arrangements; Plans for the Company" of the Offer to Purchase is incorporated
herein by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a),(c)(1)-(5) The information set forth in the "INTRODUCTION," "Section
11--Contacts and Transactions with the Company; Background of the Offer," and
"Section 12--Purpose of the Offer; the Merger Agreement; Other Recapitalization
Arrangements; Plans for the Company" of the Offer to Purchase is incorporated
herein by reference.
(c)(6),(7) The information set forth in "Section 7-- Effect of the Offer
on the Market for the Shares; Share Quotation; Exchange Act Registration; Margin
Regulations" is incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information set forth in "Section 10--Source and Amount of Funds" of
the Offer to Purchase is incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in "Section 9--Certain Information Concerning
Parent and the Purchaser," "Section 11--Contacts and Transactions with the
Company; Background of the Offer" and "Section 12--Purpose of the Offer; the
Merger Agreement; Other Recapitalization Arrangements; Plans for the
Company--The Tender Agreements" of the Offer to Purchase is incorporated herein
by reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
The information set forth in "Section 16--Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
ITEM 11. ADDITIONAL INFORMATION
(a)(1) Except as disclosed in Items 1 through 10 above, there are no
present or proposed material agreements, arrangements, understandings or
relationships between the offeror and any of its executive officers, directors,
controlling persons or subsidiaries and the subject company or any of is
executive officers, directors, controlling persons or subsidiaries.
(a)(2)-(5) The information set forth in "INTRODUCTION," "Section
14--Conditions to the Offer" and "Section 15--Certain Legal Matters" of the
Offer to Purchase is incorporated herein by reference.
(b) The information set forth in the Offer to Purchase and the letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 12. EXHIBITS.
EXHIBIT NUMBER DOCUMENT
-------------- --------
(a)(1) Offer to Purchase dated June 20, 2003.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers,
Banks, Trust Companies and Other Nominees.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Press Release issued by the Company on June 13, 2003
(incorporated by reference to the Schedule TO-C filed by
Parent and the Purchaser with the Securities and Exchange
Commission on June 13, 2003).
(a)(8) Summary Advertisement published in New York Times on June
20, 2003.
(b)(1) Commitment Letter, dated May 20, 2003 among Foothill Capital
Corporation, Silver Point Capital, L.P. and Kohlberg
Management IV, L.L.C.
(b)(2) Equity Commitment Letter, dated May 8, 2003, from Kohlberg
Management IV, L.L.C. to the Company.
(d)(1) Agreement and Plan of Merger dated as of June 12, 2003 among
Parent, the Purchaser and the Company.
(d)(2) Lock-up Agreement dated as of June 12, 2003 by and among the
Company, Parent, Fleet National Bank, as Administrative
Agent (the "Agent") and the lenders (the "Lenders") party to
the Second Amended and Restated Credit Agreement dated as of
April 15, 2003, by and among the Company, as borrower, the
Agent and the Lenders.
(d)(3) Form of Subordinated Notes Undertaking, dated as of April
29 and May 7, 2003, among the Company and each of Ionian
Nominees Limited, Securities Management Trust, Vasiliou &
Co. Inc., Credit Suisse First Boston Equities Nominees
Limited, Merrill Lynch, Maldon Electric Securities Limited,
EAP Securities Limited and New Centurion Trust Limited.
(d)(4) Form of Preference Shares Undertaking, dated as of June 12,
2003, among the Company, Wace Group Limited and each of
Aberdeen Asset Managers Ltd, New Star Asset Management
Limited and INVESCO Asset Management Limited.
(d)(5) Preference Shares Undertaking, dated as of June 12, 2003,
among the Company, Wace Group Limited and Applied Graphics
Technologies (UK) Limited.
(d)(6) Confidentiality Agreement dated March 20, 2003 between the
Company and Kohlberg Management IV, L.L.C.
(d)(7) Tender Agreement dated June 12, 2003 among Parent, the
Purchaser and Applied Printing Technologies, L.P.
(d)(8) Form of Tender Agreement dated June 12, 2003 among Parent,
the Purchaser and each of the Lenders.
(d)(9) Form of Tender Agreement dated June 12, 2003 among Parent,
the Form of Purchaser and each of Fred Drasner, Martin
Krall, Joseph Vecchiolla, David Parker and Marne Obernauer,
Jr.
(g) None.
(h) None.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3
Not applicable.
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
KAGT HOLDINGS, INC.
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: President
KAGT ACQUISITION CORP.
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: President
KOHLBERG INVESTORS IV, L.P.
By: Kohlberg Management IV, L.L.C.,
its general partner
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: Authorized Member
Manager
KOHLBERG TE INVESTORS IV, L.P.
By: Kohlberg Management IV, L.L.C.,
its general partner
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: Authorized Member
Manager
KOHLBERG OFFSHORE INVESTORS IV, L.P.
By: Kohlberg Management IV, L.L.C.,
its general partner
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: Authorized Member
Manager
KOHLBERG PARTNERS IV, L.P.
By: Kohlberg Management IV, L.L.C.,
its general partner
By: /s/ Christopher Lacovara
------------------------------------
Name: Christopher Lacovara
Title: Authorized Member
Manager
Dated: June 20, 2003
INDEX TO EXHIBITS
EXHIBIT NUMBER DOCUMENT
-------------- --------
(a)(1) Offer to Purchase dated June 20, 2003.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers,
Banks, Trust Companies and Other Nominees.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Press Release issued by the Company on June 13, 2003
(incorporated by reference to the Schedule TO-C filed by
Parent and the Purchaser with the Securities and Exchange
Commission on June 13, 2003).
(a)(8) Summary Advertisement published in New York Times on June
20, 2003.
(b)(1) Commitment Letter, dated May 20, 2003 among Foothill Capital
Corporation, Silver Point Capital, L.P. and Kohlberg
Management IV, L.L.C.
(b)(2) Equity Commitment Letter, dated May 8, 2003, from Kohlberg
Management IV, L.L.C. to the Company.
(d)(1) Agreement and Plan of Merger dated as of June 12, 2003 among
Parent, the Purchaser and the Company.
(d)(2) Lock-up Agreement dated as of June 12, 2003 by and among the
Company, Parent, Fleet National Bank, as Administrative
Agent (the "Agent") and the lenders (the "Lenders") party to
the Second Amended and Restated Credit Agreement dated as of
April 15, 2003, by and among the Company, as borrower, the
Agent and the Lenders.
(d)(3) Form of Subordinated Notes Undertaking, dated as of April
29 and May 7, 2003, among the Company and each of Ionian
Nominees Limited, Securities Management Trust, Vasiliou &
Co. Inc., Credit Suisse First Boston Equities Nominees
Limited, Merrill Lynch, Maldon Electric Securities Limited,
EAP Securities Limited and New Centurion Trust Limited.
(d)(4) Form of Preference Shares Undertaking, dated as of June 12,
2003, among the Company, Wace Group Limited and each of
Aberdeen Asset Managers Ltd, New Star Asset Management
Limited and INVESCO Asset Management Limited.
(d)(5) Preference Shares Undertaking, dated as of June 12, 2003,
among the Company, Wace Group Limited and Applied Graphics
Technologies (UK) Limited.
(d)(6) Confidentiality Agreement dated March 20, 2003 between the
Company and Kohlberg Management IV, L.L.C.
(d)(7) Tender Agreement dated June 12, 2003 among Parent, the
Purchaser and Applied Printing Technologies, L.P.
(d)(8) Form of Tender Agreement dated June 12, 2003 among Parent,
the Purchaser and each of the Lenders.
(d)(9) Form of Tender Agreement dated June 12, 2003 among Parent,
the Purchaser and each of Fred Drasner, Martin Krall, Joseph
Vecchiolla, David Parker and Marne Obernauer, Jr.
(g) None.
(h) None.