The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).
| Item 1. | Security and Issuer. |
This statement relates to the Common Stock, par value $0.01 per share (the “Shares”), of ModusLink Global Solutions, Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 1100 Winter Street, Waltham, Massachusetts 02451.
| Item 2. | Identity and Background. |
(a) This statement is filed by 3 Rivers Activist Partners, L.P., a Delaware limited partnership (“3 Rivers”), Gladius Investors, L.P., a Delaware limited partnership (“Gladius”), LCV Capital Management, LLC, a Delaware limited liability company (“LCV”), Lodovico de Visconti, Raging Capital Fund, LP, a Delaware limited partnership (“Raging Capital Fund”), Raging Capital Fund (QP), LP, a Delaware limited partnership (“Raging Capital Fund QP”), Raging Capital Management, LLC, a Delaware limited liability company (“Raging Capital”), William C. Martin, Anthony J. Bonidy, Jeffrey J. Fenton and Kenneth H. Traub. Each of the foregoing is referred to as a “Reporting Person” and collecti vely as the “Reporting Persons.”
LCV is the general partner of each of 3 Rivers and Gladius. Mr. de Visconti serves as the managing member of LCV.
Raging Capital is the general partner of each of Raging Capital Fund and Raging Capital Fund QP. Mr. Martin serves as the managing member of Raging Capital.
(b) The principal business address of each of 3 Rivers, Gladius, LCV, Mr. de Visconti and Mr. Bonidy is Fifteen Churchill Road, Suite 1000, Pittsburgh, Pennsylvania 15235.
The principal business address of each of Raging Capital Fund, Raging Capital Fund QP, Raging Capital and Mr. Martin is 254 Witherspoon Street, Princeton, New Jersey 08542.
The principal business address of Mr. Fenton is 604 Whispering Pines Drive, Pittsburgh, Pennsylvania 15238.
The principal business address of Mr. Traub is 2 Applegate Drive, Robbinsville, New Jersey 08691.
(c) The principal business of each of 3 Rivers and Gladius is investing in securities. The principal business of LCV is serving as the general partner of each of 3 Rivers and Gladius. The principal occupation of Mr. de Visconti is serving as the managing member of LCV.
The principal business of each of Raging Capital Fund and Raging Capital Fund QP is investing in securities. The principal business of Raging Capital is serving as the general partner of each of Raging Capital Fund and Raging Capital Fund QP. The principal occupation of Mr. Martin is serving as the managing member of Raging Capital.
The principal occupation of Mr. Bonidy is serving as Operating Principal of LCV. The principal occupation Mr. Fenton is serving as Principal of Devonshire Advisors LLC, an investment advisory services firm. The principal occupation of Mr. Traub is serving as President and CEO of Ethos Management, a private investment and consulting firm.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
(f) Each of Messrs. de Visconti, Martin, Bonidy, Fenton and Traub is a citizen of the United States of America.
| Item 3. | Source and Amount of Funds or Other Consideration. |
The aggregate purchase price of the 481,284 Shares beneficially owned by LCV is approximately $2,442,003, including brokerage commissions. The Shares beneficially owned by LCV consist of 418,000 Shares that were acquired with 3 Rivers’ working capital and 63,284 Shares that were acquired with Gladius’ working capital.
The aggregate purchase price of the 1,845,303 Shares beneficially owned by Raging Capital is approximately $11,038,049, including brokerage commissions. The Shares beneficially owned by Raging Capital consist of 1,086,352 Shares that were acquired with Raging Capital Fund’s working capital and 758,951 Shares that were acquired with Raging Capital Fund QP’s working capital.
The aggregate purchase price of the 51,000 Shares owned directly by Mr. Martin is approximately $322,590.
The aggregate purchase price of the 35,000 Shares owned directly by Mr. Traub is approximately $236,466.
The securities reported herein are held primarily in margin accounts maintained with prime brokers, which may extend margin credit as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations, stock exchange rules and the prime brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the accounts.
| Item 4. | Purpose of Transaction. |
The Reporting Persons have established “The Moduslink Full Value Committee” for the purpose of seeking representation on the Board of Directors of the Issuer (the “Board”). In furtherance of the foregoing, on September 10, 2010, 3 Rivers delivered a letter to the Corporate Secretary of the Issuer nominating Anthony J. Bonidy, Jeffrey J. Fenton and Kenneth H. Traub (collectively, the “Nominees”) to be elected to the Board at the 2010 annual meeting of stockholders of the Issuer, or any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof.
The Reporting Persons have engaged in discussions with the Issuer to try to reach an agreement regarding Board representation and certain corporate governance changes that the Reporting Persons believe would enhance shareholder value. Unfortunately, the Reporting Persons have been unable to reach an agreement with the Issuer. As a result, on October 7, 2010, the Reporting Persons sent a letter to the Issuer expressing their belief that the full potential of the Issuer is not being realized due to shortcomings in the Company’s operational and capital market strategies and their concerns regarding the Issuer’s corporate governance practices. The Reporting Persons also called on the Issuer to immediately implement a $ 50 to $75 million share repurchase program and align executive compensation with performance. A copy of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The Reporting Persons purchased the Shares based on their belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, and the availability of Shares at prices that would make the purchase of additional Shares desirable, the Reporting Persons may endeavor to increase their respective positions in the Issuer through, among other things, the purchase of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable.
No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon completion of any of the actions discussed above. The Reporting Persons intend to review their respective investments in the Issuer on a continuing basis and engage in discussions with management, the Board of Directors and shareholders of the Issuer concerning the business, operations and future plans of the Issuer. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future ta ke such actions with respect to their respective investments in the Issuer as they deem appropriate including, without limitation, making proposals to the Issuer concerning changes to the capitalization, the Board, ownership structure or operations of the Issuer, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares or changing their intention with respect to any and all matters referred to in Item 4.
| Item 5. | Interest in Securities of the Issuer. |
(a) The aggregate percentage of Shares reported owned by each person named herein is based upon 44,054,393 Shares outstanding as of June 4, 2010, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on June 9, 2010.
As of the date hereof, 3 Rivers owned directly 418,000 Shares, constituting less than 1% of the Shares outstanding. By virtue of their relationships with 3 Rivers discussed in further detail in Item 2, each of LCV and Mr. de Visconti may be deemed to beneficially own the Shares owned by 3 Rivers.
As of the date hereof, Gladius owned directly 63,284 Shares, constituting less than 1% of the Shares outstanding. By virtue of their relationships with Galdius discussed in further detail in Item 2, each of LCV and Mr. de Visconti may be deemed to beneficially own the Shares owned by Gladius.
As of the date hereof, Raging Capital Fund owned directly 1,086,352 Shares, constituting approximately 2.5% of the Shares outstanding. By virtue of their relationships with Raging Capital Fund discussed in further detail in Item 2, each of Raging Capital and Mr. Martin may be deemed to beneficially own the Shares owned by Raging Capital Fund.
As of the date hereof, Raging Capital Fund QP owned directly 758,951 Shares, constituting approximately 1.7% of the Shares outstanding. By virtue of their relationships with Raging Capital Fund QP discussed in further detail in Item 2, each of Raging Capital and Mr. Martin may be deemed to beneficially own the Shares owned by Raging Capital Fund QP.
As of the date hereof, Mr. Martin owned directly 51,000 Shares, constituting less than 1% of the Shares outstanding.
As of the date hereof, Mr. Traub owned directly 35,000 Shares, constituting less than 1% of the Shares outstanding.
As of the date hereof, the members of The Moduslink Full Value Committee collectively owned an aggregate of 2,412,587 Shares, constituting approximately 5.5% of the Shares outstanding.
Each of the Reporting Persons, as a member of a “group” with the other Reporting Persons for purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), may be deemed to beneficially own the Shares owned by the other Reporting Persons. The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any Shares he or it does not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the Shares reported herein that he or it does not directly own.
(b) LCV, Mr. de Visconti and 3 Rivers have shared voting and dispositive power with respect to the Shares owned directly by 3 Rivers. LCV, Mr. de Visconti and Gladius have shared voting and dispositive power with respect to the Shares owned directly by Gladius.
Raging Capital, Mr. Martin and Raging Capital Fund have shared voting and dispositive power with respect to the Shares owned directly by Raging Capital Fund. Raging Capital, Mr. Martin and Raging Capital Fund QP have shared voting and dispositive power with respect to the Shares owned directly by Raging Capital Fund QP. Mr. Martin has sole voting and dispositive power with respect to the Shares he owns directly.
Mr. Traub has sole voting and dispositive power with respect to the Shares he owns directly.
(c) Schedule A annexed hereto lists all transactions in securities of the Issuer during the past sixty days by the Reporting Persons. All of such transactions were effected in the open market.
(d) No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.
| Item 6. | Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. |
The Reporting Persons have entered into a Solicitation Agreement, as amended, pursuant to which, among other things, (i) the parties agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer; (ii) the parties agree to solicit proxies or written consents to elect the Nominees and to take all other action necessary or advisable to achieve the foregoing (the “Solicitation”); (iii) the parties agree on procedures for approving press releases and stockholder communications proposed to be made or issued by the Group or any member of the Group; (iv) each of LCV and Raging Capital agree to pay a specified proportional share of all expenses incurred by the Group in connection with the Gr oup’s activities that have been approved by LCV and Raging Capital; and (v) the parties agree that the Group shall be referred to as “The ModusLink Full Value Committee”. The Solicitation Agreement, as amended, is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
LCV and Raging Capital have entered into indemnification agreements pursuant to which they have agreed to indemnify the Nominees against claims arising from the Solicitation and any related transactions. The indemnification agreements are attached hereto as Exhibits 99.3 through 99.5 and are incorporated herein by reference.
3 Rivers has purchased in the open market from counterparties the right to put to such counterparties up to 413,000 Shares at a price of $7.50 per Share, if such right is exercised prior to or on December 18, 2010.
3 Rivers has sold in the open market to counterparties the right to call from such counterparties up to 75,000 Shares at a price of $7.50 per Share, if such right is exercised prior to or on December 18, 2010.
Gladius has purchased in the open market from counterparties the right to put to such counterparties up to 50,000 Shares at a price of $7.50 per Share, if such right is exercised prior to or on December 18, 2010.
Gladius has sold in the open market to counterparties the right to call from such counterparties up to 25,000 Shares at a price of $7.50 per Share, if such right is exercised prior to or on December 18, 2010.
Gladius has purchased in the open market from counterparties the right to call from such counterparties up to 23,200 Shares at a price of $5.00 per Share, if such right is exercised prior to or on December 18, 2010.
Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.
| Item 7. | Material to be Filed as Exhibits. |
| | 99.1 | Letter to the Board of Directors of ModusLink Global Solutions, Inc. from LCV Capital Management, LLC and Raging Capital Management, LLC, dated October 7, 2010. |
| | 99.2 | Solicitation Agreement as amended, by and among 3 Rivers Activist Partners, L.P., Gladius Investors, L.P., LCV Capital Management, LLC, Lodovico de Visconti, Raging Capital Fund, LP, Raging Capital Fund (QP), LP, Raging Capital Management, LLC, William C. Martin, Anthony J. Bonidy, Jeffrey J. Fenton and Kenneth H. Traub dated September 16, 2010. |
| | 99.3 | Indemnification Agreement, by and between LCV Capital Management, LLC, Raging Capital Management, LLC and Anthony J. Bonidy dated October 7, 2010. |
| | 99.4 | Indemnification Agreement, by and between LCV Capital Management, LLC, Raging Capital Management, LLC and Jeffrey J. Fenton dated October 7, 2010. |
| | 99.5 | Indemnification Agreement, by and between LCV Capital Management, LLC, Raging Capital Management, LLC and Kenneth H. Traub dated October 7, 2010. |
SIGNATURES
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Dated: October 7, 2010
| | 3 RIVERS ACTIVIST PARTNERS, L.P. |
| | | |
| | By: | LCV Capital Management, LLC General Partner |
| | |
| | By: | /s/ Lodovico de Visconti |
| | | Name: | Lodovico de Visconti |
| | | Title: | Managing Member |
| | GLADIUS INVESTORS, L.P. |
| | | |
| | By: | LCV Capital Management, LLC General Partner |
| | |
| | By: | /s/ Lodovico de Visconti |
| | | Name: | Lodovico de Visconti |
| | | Title: | Managing Member |
| | LCV CAPITAL MANAGEMENT, LLC |
| | |
| | By: | /s/ Lodovico de Visconti |
| | | Name: | Lodovico de Visconti |
| | | Title: | Managing Member |
| | RAGING CAPITAL FUND, LP |
| | | |
| | By: | Raging Capital Management, LLC General Partner |
| | |
| | By: | /s/ William C. Martin |
| | | Name: | William C. Martin |
| | | Title: | Managing Member |
| | RAGING CAPITAL FUND (QP), LP |
| | | |
| | By: | Raging Capital Management, LLC General Partner |
| | |
| | By: | /s/ William C. Martin |
| | | Name: | William C. Martin |
| | | Title: | Managing Member |
| | RAGING CAPITAL MANAGEMENT, LLC |
| | |
| | By: | /s/ William C. Martin |
| | | Name: | William C. Martin |
| | | Title: | Managing Member |
SCHEDULE A
Transactions in the Shares During the Past 60 Days
Class of Security | Securities Purchased/(Sold) | Price Per Share ($) | Date of Purchase/Sale |
3 Rivers Activist Partners, L.P.
| December 2010 Put Option, ($7.50 Strike Price) | 1,250 | | 1.000 | 09/10/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 1,250 | | 1.050 | 09/10/10 |
| Common Stock | 50,000 | | 7.3776 | 09/21/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 500 | | 0.8531 | 09/21/10 |
| Common Stock | 11,000 | | 7.0813 | 09/22/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 110 | | 0.9545 | 09/22/10 |
| Common Stock | 6,000 | | 6.7217 | 09/28/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 10 | | 0.9500 | 09/28/10 |
| Common Stock | 26,000 | | 6.1756 | 09/29/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 260 | | 1.5346 | 09/29/10 |
| Common Stock | 75,000 | | 6.4500 | 10/07/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 750 | | 1.3000 | 10/07/10 |
| December 2010 Call Option, ($7.50 Strike Price) | (750) | | 0.1000 | 10/07/10 |
Gladius Investors, L.P.
| Common Stock | 20,916 | | 6.1726 | 09/29/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 250 | | 1.5200 | 09/29/10 |
| Common Stock | 2,268 | | 6.2738 | 09/30/10 |
| Common Stock | 4,100 | | 6.2610 | 10/04/10 |
| Common Stock | 25,000 | | 6.4500 | 10/07/10 |
| December 2010 Put Option, ($7.50 Strike Price) | 250 | | 1.3000 | 10/07/10 |
| December 2010 Call Option, ($7.50 Strike Price) | (250) | | 0.1000 | 10/07/10 |
| December 2010 Call Option, ($5.00 Strike Price) | 232 | | 1.6000 | 10/07/10 |
| Common Stock | 11,000 | | 6.3600 | 10/07/10 |
Raging Capital Fund, LP
| Common Stock | 5,330 | | 6.4100 | 07/29/10 |
| Common Stock | 2,702 | | 6.4000 | 08/02/10 |
| Common Stock | 23,664 | | 6.4991 | 08/04/10 |
| Common Stock | 14,500 | | 6.5000 | 08/05/10 |
| Common Stock | 3,530 | | 6.3567 | 08/06/10 |
| Common Stock | 17,400 | | 6.2700 | 08/11/10 |
| Common Stock | 8,700 | | 6.1700 | 08/12/10 |
| Common Stock | 24,559 | | 6.0644 | 08/13/10 |
Class of Security | Securities Purchased/(Sold) | Price Per Share ($) | Date of Purchase/Sale |
| Common Stock | 580 | | 5.9700 | 08/19/10 |
| Common Stock | 3,489 | | 5.9938 | 08/20/10 |
| Common Stock | 10,229 | | 5.9370 | 08/23/10 |
| Common Stock | 10,000 | | 5.8400 | 08/24/10 |
| Common Stock | 4,274 | | 5.8741 | 08/25/10 |
| Common Stock | 14,500 | | 5.9305 | 08/26/10 |
| Common Stock | 5,800 | | 5.9000 | 08/27/10 |
| Common Stock | 17,400 | | 5.8300 | 08/30/10 |
| Common Stock | 732 | | 5.8300 | 09/01/10 |
| Common Stock | 10,498 | | 6.4620 | 09/08/10 |
| Common Stock | 9,101 | | 6.3981 | 09/08/10 |
| Common Stock | 8,165 | | 6.6952 | 09/10/10 |
| Common Stock | 11,815 | | 7.0481 | 09/14/10 |
| Common Stock | 11,600 | | 7.1234 | 09/17/10 |
| Common Stock | 30,000 | | 6.2133 | 09/29/10 |
| Common Stock | 6,093 | | 6.2566 | 09/30/10 |
Raging Capital Fund (QP), LP
| Common Stock | 3,859 | | 6.4100 | 07/29/10 |
| Common Stock | 1,955 | | 6.4000 | 08/02/10 |
| Common Stock | 17,136 | | 6.4991 | 08/04/10 |
| Common Stock | 10,500 | | 6.5000 | 08/05/10 |
| Common Stock | 2,555 | | 6.3567 | 08/06/10 |
| Common Stock | 12,600 | | 6.2700 | 08/11/10 |
| Common Stock | 6,300 | | 6.1700 | 08/12/10 |
| Common Stock | 17,784 | | 6.0644 | 08/13/10 |
| Common Stock | 420 | | 5.9700 | 08/19/10 |
| Common Stock | 2,525 | | 5.9938 | 08/20/10 |
| Common Stock | 7,407 | | 5.9370 | 08/23/10 |
Class of Security | Securities Purchased/(Sold) | Price Per Share ($) | Date of Purchase/Sale |
| Common Stock | 3,094 | | 5.8741 | 08/25/10 |
| Common Stock | 10,500 | | 5.9305 | 08/26/10 |
| Common Stock | 4,200 | | 5.9000 | 08/27/10 |
| Common Stock | 12,600 | | 5.8300 | 08/30/10 |
| Common Stock | 529 | | 5.8300 | 09/01/10 |
| Common Stock | 7,602 | | 6.4620 | 09/08/10 |
| Common Stock | 6,589 | | 6.3981 | 09/08/10 |
| Common Stock | 5,911 | | 6.6952 | 09/10/10 |
| Common Stock | 38,185 | | 7.0481 | 09/14/10 |
| Common Stock | 8,400 | | 7.1234 | 09/17/10 |
| Common Stock | 4,411 | | 6.2566 | 09/30/10 |
William C. Martin
| Common Stock | 3,328 | | 6.1600 | 08/12/10 |
| Common Stock | (100) | | 6.2400 | 09/03/10 |
| Common Stock | (6,328) | | 6.2100 | 09/03/10 |
| Common Stock | 16,000 | | 6.1500 | 09/07/10 |
| Common Stock | 5,000 | | 6.2000 | 09/08/10 |
| Common Stock | 10,000 | | 6.3100 | 09/08/10 |
| Common Stock | 1,100 | | 6.3000 | 09/08/10 |
| Common Stock | 5,000 | | 7.1234 | 09/17/10 |
| Common Stock | 4,000 | | 6.1400 | 09/29/10 |
| Common Stock | 10,000 | | 6.3666 | 10/06/10 |
Kenneth H. Traub
| Common Stock | 1,800 | | 6.6290 | 09/09/10 |
| Common Stock | 5,200 | | 6.6300 | 09/09/10 |
| Common Stock | 100 | | 6.6300 | 09/09/10 |
| Common Stock | 1,200 | | 6.6290 | 09/09/10 |
| Common Stock | 1,700 | | 6.6290 | 09/09/10 |
| Common Stock | 5,000 | | 6.6800 | 09/10/10 |
| Common Stock | 10,000 | | 7.2000 | 09/28/10 |
| Common Stock | 10,000 | | 6.3500 | 09/29/10 |
