SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(D)(1) OR SECTION 13(E)(1) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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APPLIED GRAPHICS TECHNOLOGIES, INC.
(Name Of Subject Company (Issuer))
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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)
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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)
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COPIES TO:
Daniel S. Evans, Esq.
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110
Telephone: (617) 951-7000
CALCULATION OF FILING FEE
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Transaction Valuation* Amount Of Filing Fee**
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$8,559,980.25 $692.50
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* 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.
** Previously paid.
[ ] 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: [ ]
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This Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule TO (the "Schedule TO") filed with the Securities Exchange Commission on
June 20, 2003 by KAGT Holdings, Inc. ("Parent"), KAGT Acquisition Corp.
("Purchaser"), Kohlberg Investors IV, L.P., Kohlberg TE Investors IV, L.P.,
Kohlberg Offshore Investors IV, L.P. and Kohlberg Partners IV, L.P. The Schedule
TO relates to the offer by the Purchaser to purchase all of the outstanding
shares of common stock, $0.001 par value 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, less any required withholding taxes and without interest
thereof, upon the terms and subject to the conditions set forth in the related
offer to purchase dated June 20, 2003 (the "Offer to Purchase"), and in the
related letter of transmittal. Capitalized terms used and not otherwise defined
herein have the meanings assigned thereto in the Schedule TO.
ITEMS 1 THROUGH 9, 11 AND 12
Items 1 through 9, 11 and 12 of the Schedule TO which incorporate by
reference the information contained in the Offer to Purchase are hereby amended
as follows:
1. The last sentence of the first paragraph of the cover page of the
Offer to Purchase is hereby amended and restated to read in its
entirety as follows:
"CERTAIN STOCKHOLDERS OF THE COMPANY (AS SPECIFIED IN SECTION 12
"PURPOSE OF THE OFFER; THE MERGER AGREEMENT; OTHER RECAPITALIZTION
ARRANGEMENTS; PLANS FOR THE COMPANY - THE TENDER AGREEMENTS") HAVE
AGREED TO TENDER AN AGGREGATE OF 33.9% OF THE OUTSTANDING FULLY
DILUTED SHARES (AS DEFINED IN THE MERGER AGREEMENT) (INCLUDING IN
THE MONEY OPTIONS) IN THE OFFER AT A PRICE OF $0.85 PER SHARE NET TO
THE SELLER IN CASH."
2. The first two sentences of the first paragraph in Section 4 of the
Offer to Purchase entitled "Acceptance for Payment and Payment"
beginning on page 13 of the Offer to Purchase are hereby amended and
restated to read in their entirety as follows:
"Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), the Purchaser will
accept for payment and will pay for all Shares validly tendered
prior to the Expiration Date and not properly withdrawn in
accordance with Section 3 of this Offer to Purchase promptly after
the Expiration Date. The Purchaser, subject to the Merger Agreement,
expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for the Shares in order to
comply in whole or in part with any required regulatory or
governmental approvals, including, without limitation, pursuant to
the HSR Act, if applicable."
3. The third sentence of the first full paragraph on page 19 of the
Offer to Purchase in Section 8 of the Offer to Purchase entitled
"Certain Information Concerning the Company - Available Information"
is hereby amended and restated to read in its entirety as follows:
"Such reports, proxy statements and other information should be
available for inspection at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549."
4. The last sentence of Section 9 of the Offer to Purchase entitled
"Certain Information Concerning Parent and the Purchaser" on page 21
of the Offer to Purchase is hereby amended and restated to read in
its entirety as follows:
"Copies of such information should also be obtainable by mail, upon
payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington,
D.C. 20549.
5. Section 10 of the Offer to Purchase is amended by adding the
following paragraph at the end of the Section:
"Under the terms of the Debt Commitment Letter, Foothill and Silver
Point will extend a senior secured credit facility in an aggregate
amount of up to $119,000,000. This loan facility will be in the form
of a revolving credit facility (the "Revolver") of up to $70,000,000
(less the aggregate amount of any letters of credit outstanding in
an amount not to exceed $10,000,000), one term loan ("Term Loan A")
of up to $22,000,000 and a second term Loan ("Term Loan B") of up to
$27,000,000. Amounts outstanding under the Revolver will bear
interest, at the borrowers' option, at (a) the rate of interest
announced within Wells Fargo at its principal office in San
Francisco as its "prime rate" (the "Base Rate") plus 1.5 percentage
points or (b) at the LIBOR rate plus 3 percentage points. Amounts
outstanding under Term Loan A will bear interest at the Base Rate
plus 2 percentage points, while amounts outstanding under the Term
Loan B will bear interest at the Base Rate plus 8.25% (or a minimum
of 12.5%). The Revolver and Term Loan A each would have a term of
five years from the closing date and the Term Loan B would have a
term of four years from the closing date. These terms are
conditioned upon, among other things, the execution and delivery of
mutually acceptable loan documents. The Debt Commitment Letter is
filed as Exhibit (b)(1) to the Schedule TO. You should read the Debt
Commitment Letter in its entirety for a more complete description of
the matters summarized in this paragraph."
6. The first sentence of Section 12 of the Offer to Purchase entitled
"Purpose of the Offer; the Merger Agreement: Other Recapitalization
Arrangements; Plans for the Company - The Lock-Up Agreement" in the
subsection of Section 12 of the Offer to Purchase entitled "The
Lock-Up Agreement" on page 34 of the Offer to Purchase is hereby
amended and restated to read in its entirety as follows:
"Fleet National Bank, Bank of America, N.A., Wachovia Bank, N.A., JP
Morgan Chase Bank, The Bank of New York, Sovereign Bank, Suntrust
Bank, N.A., Citizens Bank of Massachusetts, The Bank of Nova Scotia,
PB Capital Corporation, GE Capital CFE, Inc. (such persons
collectively constituting all of the Lenders) have entered into a
Lock-Up Agreement (the "Lock-Up Agreement") with the Company and
Parent dated June 12, 2003, pursuant to which the Lenders have
agreed, subject to the completion of definitive documentation, to
cancel all obligations owing them under the Company Credit Agreement
and cancel all warrants for Shares issued by the Company to the
Lenders at an aggregate price equal to the sum of (a) either (i) 55%
of the face value of the outstanding debt under the Company Credit
Agreement as of June 12, 2003 in cash or (ii) 53% of the face value
of the outstanding debt under the Company Credit Agreement as of
June 12, 2003 in cash and options to receive 2% of the fully diluted
common stock of Parent as of the closing date of the
Recapitalization Transactions; (b) accrued interest and 100% of the
amounts borrowed after June 12, 2003; and (c) cash in the amount of
2% of the outstanding debt under the Company Credit Agreement as of
June 12, 2003 in the event that the Company's Consolidated EBITDA
(as defined in the Company Credit Agreement) exceeds $48,000,000 for
the 2004 fiscal year.
7. A new sentence is hereby added to Section 12 of the Offer to
Purchase entitled "Purpose of the Offer; the Merger Agreement; Other
Recapitalization Arrangements; Plans for the Company" directly
following the first sentence of the subsection of Section 12 of the
Offer to Purchase entitled "The Lock-Up Agreement" on page 34 of the
Offer to Purchase to read in its entirety as follows:
"Under the terms of the Lock-Up Agreement, the Lenders have the
right to determine whether a portion of their compensation will be
in stock in the manner described in clause (a) of the preceding
sentence."
8. The first sentence of Section 12 of the Offer to Purchase entitled
"Purpose of the Offer; the Merger Agreement; Other Recapitalization
Arrangements; Plans for the Company - The Tender Agreements" in the
subsection of Section 12 of the Offer to Purchase entitled "The
Tender Agreements" on page 35 of the Offer to Purchase is hereby
amended and restated to read in its entirety as follows:
"Parent and the Purchaser have entered into Tender Agreements (the
"Tender Agreements") with Applied Printing Technologies, L.P., Fred
Drasner, Martin Krall, Joseph Vecchiolla, David Parker, Marne
Obernaur, Jr. and each of the Lenders (collectively, the "Principal
Shareholders"), who together own 33.9% (including in-the-money
options) of the Fully Diluted Shares, whereby the Principal
Shareholders have agreed to tender their Shares to the Purchaser in
the Offer within 10 days following the commencement of the Offer at
$0.85 per share."
9. The clause immediately preceding the last paragraph in Section 14 of
the Offer to Purchase entitled "Certain Conditions of the Offer"
beginning on page 38 of the Offer to Purchase is amended and
restated to read in its entirety as follows:
"which, in the sole and good faith judgment of the Purchaser or
Parent, in any such case, and regardless of the circumstances giving
rise to any such condition (excluding a circumstance relating solely
from a willful and material breach by Parent or the Purchaser),
makes it inadvisable to proceed with such acceptance for payment or
payment.
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
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Name: Christopher Lacovara
Title: President
KAGT ACQUISITION CORP.
By: /s/ Christopher Lacovara
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Name: Christopher Lacovara
Title: President
KOHLBERG INVESTORS IV, L.P.
By: Kohlberg Management IV, L.L.C.,
its general partner
By: /s/ Christopher Lacovara
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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
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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
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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
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Name: Christopher Lacovara
Title: Authorized Member Manager
Dated: July 7, 2003
INDEX TO EXHIBITS
EXHIBIT NUMBER DOCUMENT
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*(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.
*Previously Filed