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. 3)
Health Grades, Inc.
(Name of Subject Company (Issuer))
Mountain Acquisition Corp.
Mountain Merger Sub Corp.
(Name of Filing Persons (Offeror))
Vestar Capital Partners V, L.P.
(Name of Filing Persons—(Other Person(s))
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* | Amount of Filing Fee** | |
|---|---|---|
| $294,000,586.00 | $20,962.24 | |
| Amount Previously Paid: | $20,962.24 | Filing Party: | Mountain Acquisition Corp. | |||
| Form or Registration No.: | Schedule TO | Date Filed: | August 10, 2010 |
Check the appropriate boxes below to designate any transactions to which the statement relates:
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:
This Amendment No. 3 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."
All the information set forth in the Offer to Purchase is incorporated by reference herein in response to Items 1 through 9 and Item 11 in this Schedule TO, and is supplemented by the information specifically provided in this Schedule TO.
This Amendment No. 3 is being filed to amend and supplement Items 11 and 12 as reflected below.
Item 11. Additional Information.
Regulation M-A Item 1011
(a) Agreements, Regulatory Requirements and Legal Proceedings. Item 11(a) of the Schedule TO is hereby amended and supplemented by adding the following paragraph immediately before the last paragraph of the sub-section captioned "General."
On August 17, 2010, another putative stockholder class action suit styled as Sarah E. Tomsky v. Health Grades, Inc., et al., Case No. 1:10-cv-01962-WDM was filed in the United States District Court for the District of Colorado against Health Grades, the directors of Health Grades, certain officers of Health Grades and Vestar. The complaint generally alleges that the directors of Heath Grades breached their fiduciary duties in the process of negotiating and entering into the Merger Agreement. In that regard, the complaint includes, among other things, allegations that the consideration to be received for Health Grades is unfair and inadequate; that the Merger Agreement includes inappropriate "no solicitation," "match right," "termination fee" and "Top-Up Option" provisions; that the Board may consider alternatives to the transaction but only under a limited set of circumstances, and that the combined effect of these provisions is to preclude other bidders from bidding for Health Grades; that the "Top-Up Option" is invalid because the Board did not determine the terms of the consideration for the "Top-Up Shares," and because it impairs appraisal rights and is a sham transaction; and that both the Board and Health Grades failed to disclose material facts in connection with the Merger or disclosed materially misleading information. The complaint also asserts that Health Grades and Vestar aided and abetted these alleged breaches by the directors of Health Grades of their fiduciary duties. The complaint seeks class certification, certain forms of injunctive relief (including enjoining consummation of the Tender Offer, the Top-Up Option, and the Merger), rescission of the Merger, unspecified damages, declaratory relief stating that the Top-Up Option is invalid and may not be exercised under Delaware law, and payment of plaintiff's attorneys' costs and fees. The foregoing description is qualified in its entirety by reference to the complaint, which is filed as Exhibit (a)(10) hereto.
On August 18, 2010, the Court of Chancery of the State of Delaware held a hearing in the Forgo and Weigard cases. At the hearing, the Court ordered expedited discovery and scheduled a preliminary injunction hearing for September 3, 2010, limited to certain allegations of breach of fiduciary duty relating to the process of negotiating and entering into the Merger Agreement. Specifically, the Court ordered discovery and a hearing as to whether the "no shop" and "termination fee" provisions in the Merger Agreement are appropriate under the circumstances. The Court declined to order expedited discovery or a hearing on the plaintiffs' claims that Health Grades' disclosures in the Schedule 14D-9 were inadequate or that the "Top-Up Option" violated Delaware law.
Regulation M-A Item 1016
Item 12 of the Schedule TO is amended and supplemented by adding the following exhibit:
| Exhibit No. | | |
|---|---|---|
| (a)(10) | Shareholder Class Action Complaint and Jury Demand dated August 17, 2010 (Sarah E. Tomsky v. Health Grades, Inc., et al.). |
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: August 20, 2010 | ||||
MOUNTAIN MERGER SUB CORP. | ||||
By: | /s/ STEVEN DELLA ROCCA | |||
| Name: | Steven Della Rocca | |||
| Title: | Secretary | |||
MOUNTAIN ACQUISITION CORP. | ||||
By: | /s/ STEVEN DELLA ROCCA | |||
| Name: | Steven Della Rocca | |||
| Title: | Secretary | |||
VESTAR CAPITAL PARTNERS V, L.P. | ||||
By: Vestar Associates V, L.P., | ||||
| its General Partner | ||||
By: Vestar Managers V Ltd.,its General Partner | ||||
By: | /s/ BRIAN P. SCHWARTZ | |||
| Name: | Brian P. Schwartz | |||
| Title: | Authorized Signatory | |||
| (a)(1)(A) | Offer to Purchase, dated August 10, 2010.* | |
(a)(1)(B) | Letter of Transmittal.* | |
(a)(1)(C) | Notice of Guaranteed Delivery.* | |
(a)(1)(D) | Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* | |
(a)(1)(E) | Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.* | |
(a)(1)(F) | 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).* | |
(a)(1)(G) | Summary Advertisement as published on August 10, 2010.* | |
(a)(5) | Class Action Complaint and Jury Demand dated July 30, 2010 (Reginald W. Harris v. Vestar Capital Partners V, L.P. et al.).* | |
(a)(6) | Class Action Complaint and Jury Demand dated August 4, 2010 (Medford Bragg v. Vestar Capital Partners V, L.P. et al.).* | |
(a)(7) | Press Release of Affiliates of Vestar Capital Partners V, L.P., dated August 10, 2010.* | |
(a)(8) | Verified Class Action Complaint dated August 12, 2010 (Tove Forgo v. Health Grades, Inc. et. al.).* | |
(a)(9) | Verified Class Action Complaint for Breach of Fiduciary Duty dated August 16, 2010 (Peter P. Weigard v. Kerry Hicks, et. al.).* | |
(a)(10) | Shareholder Class Action Complaint and Jury Demand dated August 17, 2010 (Sarah E. Tomsky v. Health Grades, Inc., et al.). | |
(d)(1) | 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).* | |
(d)(2) | 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).* |
