SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-3
(RULE 13e-100)
TRANSACTION STATEMENT UNDER SECTION 13(e)
OF THE SECURITIES EXCHANGE ACT OF 1934 AND 13e-3 THEREUNDER
AMENDMENT NO. 1
ATLANTIC DATA SERVICES, INC.
(Name of the Issuer)
ATLANTIC DATA SERVICES, INC.
ADS ACQUISITION COMPANY LLC
ADS PARENT ACQUISITION LLC
ROBERT W. HOWE
WILLIAM H. GALLAGHER
LEE M. KENNEDY
GENERAL ATLANTIC PARTNERS II, L.P.
GAP COINVESTMENT PARTNERS, L.P.
GENERAL ATLANTIC PARTNERS, LLC
(Name of Persons Filing Statement)
COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of Class of Securities)
048523104
(CUSIP Number of Class of Securities)
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ROBERT W. HOWE
C/O ATLANTIC DATA SERVICES, INC.
ONE BATTERYMARCH PARK
QUINCY, MA 02169
(617) 770-3333
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on
Behalf of the Persons Filing Statement)
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Copies to:
MITCHELL S. BLOOM, ESQ. JOHN J. EGAN III, ESQ. DOUGLAS A. CIFU, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP DENNIS J. WHITE, ESQ. PAUL, WEISS, RIFKIND, WHARTON &
125 HIGH STREET MCDERMOTT WILL & EMERY GARRISON LLP
BOSTON, MA 02110 28 STATE STREET 1285 AVENUE OF THE AMERICAS
TELEPHONE: (617) 248-7000 BOSTON, MA 02109-1775 NEW YORK, NY 10019-6064
FACSIMILE: (617) 248-7100 TELEPHONE: (617) 535-4000 TELEPHONE: (212) 373-3000
FACSIMILE: (617) 535-3800 FACSIMILE: (212) 757-3990
This statement is filed in connection with (check the appropriate box):
(a) [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or
Rule 13e-3(c) under the Securities Exchange Act of 1934.
(b) [ ] The filing of a registration statement under the Securities
Act of 1933.
(c) [ ] A tender offer.
(d) [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [X]
Check the following box if the filing is a final amendment reporting the results
of the transaction. [ ]
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation $32,335,808.71* Amount of Filing Fee: $2,615.97**
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================================================================================
* For purposes of calculating the fee only. The amount assumes (i) the
exchange of 9,736,124 shares of common stock, $.01 par value per share (the
"Common Stock"), of Atlantic Data Services, Inc. for a $3.25 per share merger
consideration and (ii) the conversion of options to purchase 389,842 shares of
Common Stock, with an average exercise price of $1.4713, into a right to receive
a cash payment equal to the product of (1) the number of shares underlying such
options and (2) the difference between $3.25 and the per share exercise price of
such options.
** The amount of the filing fee calculated in accordance with Rule 0-11 of
the Securities Exchange Act of 1934 equals 1/50th of 1% of the value of
the shares to be converted in the merger.
[X] Check 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: $2,615.97 Filing Party: Atlantic Data Services, Inc.
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Form or Registration No.: Schedule 14A Date Filed: August 7, 2003
2
INTRODUCTION
This Amendment No. 1 to Rule 13e-3 Transaction Statement on Schedule
13E-3 (the "Schedule 13E-3") relates to an Agreement and Plan of Merger dated
as of July 21, 2003 (as amended from time to time, the "Merger Agreement"), by
and among ADS Acquisition Company LLC, a Massachusetts limited liability
company ("Acquisition Company"), ADS Parent Acquisition LLC, a Massachusetts
limited liability company ("Parent LLC") and Atlantic Data Services, Inc., a
Massachusetts corporation (the "Company"). A copy of the Merger Agreement is
filed as Annex A to the Preliminary Proxy Statement on Schedule 14A (the "Proxy
Statement") filed by the Company with the Securities and Exchange Commission
(the "Commission") on the date hereof. This Schedule 13E-3 is being filed by
Robert W. Howe, William H. Gallagher, Lee M. Kennedy, General Atlantic Partners
II, L.P., a Delaware limited partnership, and GAP Coinvestment Partners, L.P.,
a New York limited partnership (the "Principals"),General Atlantic Partners,
LLC, a Delaware limited liability company, the Company, Acquisition Company,
a wholly-owned subsidiary of Parent LLC, and Parent LLC, which is owned solely
by the Principals (each a "Filing Person" and collectively, the "Filing
Persons").
The following responses and cross-references are being supplied
pursuant to General Instructions F and G to Schedule 13E-3 and show the
locations in the Proxy Statement (including all annexes and appendices thereto)
of the information required to be included in response to the items of this
Schedule 13E-3. The information set forth in the Proxy Statement, including all
exhibits thereto, is hereby expressly incorporated herein by reference and the
responses to each item of this Schedule 13E-3 are qualified in their entirety
by reference to the information contained in the Proxy Statement and the
exhibits thereto.
ITEM 1. SUMMARY TERM SHEET.
REGULATION M-A
ITEM 1001
The information set forth in the sections entitled "Questions and
Answers About the Merger" and "Summary Term Sheet" in the Proxy Statement is
incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
REGULATION M-A
ITEM 1002
(a) The Company is the subject company of this Schedule 13E-3. The
information set forth in the section of the Proxy Statement entitled "Summary
Term Sheet - The Companies" is incorporated herein by reference.
(b)-(d) The Common Stock is the subject class of equity securities.
The information set forth in the section of the Proxy Statement entitled
"Certain Information Concerning Our Company - Price Range of Shares; Dividends;
and Stock Repurchases" is incorporated herein by reference.
(e) Not applicable.
(f) No Filing Person has purchased any shares of Common Stock
during the past two years.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSONS.
REGULATION M-A
ITEM 1003
(a)-(c) This Schedule 13E-3 is being filed by the Filing Persons. The
information set forth in the sections of the Proxy Statement entitled "Summary
Term Sheet - The Companies," "Summary Term Sheet - The Principals" and "Special
Factors - Identity and Background" is incorporated herein by reference.
No Filing Person or any person specified in Instruction C of this
Schedule 13E-3: (a) has been convicted in a criminal proceeding during the past
five years (excluding traffic violations or similar misdemeanors) or (b) was a
party to any judicial or administrative proceeding during the past five years
(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.
REGULATION M-A
ITEM 1004
(a)(2) The information set forth in the cover page of the Proxy
Statement and in the sections of the Proxy Statement entitled "Question and
Answers About the Merger," "Summary Term Sheet," "Special Factors - Our Reasons
for the Merger and Fairness of the Merger," "Special Factors - The Reasons of
Acquisition Company, Parent LLC and the Principals for the Merger and Fairness
of the Merger," "The Special Meeting - Required Votes," "The Merger Agreement
and Other Material Agreements," "Accounting Treatment" and "Material United
States Federal Income Tax Consequences of the Merger" is incorporated herein by
reference.
(b) Not applicable.
(c) The information set forth in the sections of the Proxy
Statement entitled "The Merger Agreement and Other Material Agreements,"
"Certain Information Concerning Our Company - Interests of Certain Persons in
the Merger" and "Certain Information Concerning Our Company - Option Payments To
Executive Officers and Directors" is incorporated herein by reference.
(d) The information set forth in the section of the Proxy
Statement entitled "The Special Meeting - Appraisal Rights" is incorporated
herein by reference.
(e) No provisions have been made.
(f) Not applicable.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AMENDMENTS.
REGULATION M-A
ITEM 1005
(a) The information set forth in the section of the Proxy
Statement entitled "Certain Information Concerning Our Company -- Interests of
Certain Persons in the Merger" is incorporated herein by reference.
(b)-(c) The information set forth in the section of the Proxy
Statement entitled "Special Factors - Background of the Merger" is incorporated
herein by reference.
(e) The information set forth in the sections of the Proxy
Statement entitled "Certain Information Concerning Our Company -- Interests of
Certain Persons in the Merger," "Certain Information Concerning Our Company -
Option Payments To Executive Officers and Directors" and "The Merger Agreement
and Other Material Agreements" is incorporated herein by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
REGULATION M-A
ITEM 1006
(b) The information set forth in the sections of the Proxy
Statement entitled "The Merger Agreement and Other Material Agreements - Merger
Agreement - Merger Consideration" and "The Merger Agreement and
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Other Material Agreements - Merger Agreement - Treatment of Options and
Warrants" is incorporated herein by reference.
(c) The information set forth in the sections of the Proxy
Statement entitled "Summary Term Sheet," "Questions and Answers about the
Merger," "Special Factors - Purposes of the Merger and Plans or Proposals" and
"The Merger Agreement and Other Material Agreements" is incorporated herein by
reference.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
REGULATION M-A
ITEM 1013
(a)-(d) The information set forth in the sections of the Proxy
Statement entitled "Summary Term Sheet," "Questions and Answers about the
Merger," "Special Factors - Our Reasons for the Merger and Fairness of the
Merger," "Special Factors - The Reasons of Acquisition Company, Parent LLC and
the Principals for the Merger and Fairness of the Merger," "Special Factors -
Purposes of the Merger and Plans or Proposals" and "Material United States
Federal Income Tax Consequences of the Merger" is incorporated herein by
reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
REGULATION M-A
ITEM 1014
(a)-(b) The information set forth in the sections of the Proxy
Statement entitled "Special Factors - Our Reasons for the Merger and Fairness of
the Merger" and "Special Factors - The Reasons of Acquisition Company, Parent
LLC and the Principals for the Merger and Fairness of the Merger" is
incorporated herein by reference.
(c) The information set forth in the section of the Proxy
Statement entitled "The Special Meeting - Required Votes" is incorporated herein
by reference.
(d) The information set forth in the sections of the Proxy
Statement entitled "Special Factors - Our Reasons for the Merger and Fairness of
the Merger" and "Special Factors - Opinion of Adams, Harkness & Hill, Inc." is
incorporated herein by reference.
(e) The information set forth in the section of the Proxy
Statement entitled "Special Factors - Recommendations of the Independent
Committee and Board of Directors" is incorporated herein by reference.
(f) None.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.
REGULATION M-A
ITEM 1015
(a)-(c) The information set forth in the section of the Proxy
Statement entitled "Special Factors - Opinion of Adams, Harkness & Hill, Inc.,"
Annex B to the Proxy Statement, "Opinion of Adams, Harkness & Hill, Inc." and
the Fairness Opinion Presentation, dated as of July 21, 2003, prepared by Adams,
Harkness & Hill, Inc. attached hereto as Exhibit (c)(2) is incorporated herein
by reference.
ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
REGULATION M-A
ITEM 1007
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(a) The information set forth in the section of the Proxy
Statement entitled "Merger Financing" is incorporated herein by reference.
(b) Not applicable.
(c) The information set forth in the section of the Proxy
Statement entitled "Estimated Fees and Expenses of the Merger" and "The Merger
Agreement and Other Material Agreements - The Merger Agreement - Expenses;
Termination Fee" is incorporated herein by reference.
(d) Not applicable.
ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
REGULATION M-A
ITEM 1008
(a) The information set forth in the sections of the Proxy
Statement entitled "Certain Beneficial Ownership of Shares," "Certain
Information Concerning Our Company -- Interests of Certain Persons in the
Merger" and "Certain Information Concerning Our Company - Option Payments To
Executive Officers and Directors" is incorporated herein by reference.
(b) Not applicable.
ITEM 12. THE SOLICITATION OR RECOMMENDATION.
REGULATION M-A
ITEM 1012
(d) and (e) The information set forth in the sections of the Proxy
Statement entitled "Summary Term Sheet - Overview," "Certain Information
Concerning Our Company - Interests of Certain Persons in the Merger," "Special
Factors - The Reasons of Acquisition Company, Parent LLC and the Principals for
the Merger and Fairness of the Merger" and "The Merger Agreement and Other
Material Agreements - The Voting Agreement" is incorporated herein by reference.
ITEM 13. FINANCIAL STATEMENTS.
REGULATION M-A
ITEM 1010
(a)(1)-(3) The financial statements set forth in Annex C to the
Proxy Statement, Annual Report on Form 10-K for the Fiscal Year Ended March 31,
2003 and Annex D to the Proxy Statement, Quarterly Report on Form 10-Q for the
Fiscal Quarter Ended June 30, 2003 are incorporated herein by reference.
(4) The book value per share as of the end of the fiscal quarter
ended June 30, 2003 is $2.87.
(b) Not applicable.
ITEM 14. PERSONS/ASSETS EMPLOYED, RETAINED, COMPENSATED OR USED.
REGULATION M-A
ITEM 1009
(a), (b) The information set forth in the sections of the Proxy
Statement entitled "Special Factors - Background of the Merger," "Special
Factors - Opinion of Adams, Harkness & Hill, Inc." and "The Special Meeting -
Solicitation of Proxies" is incorporated herein by reference.
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ITEM 15. ADDITIONAL INFORMATION.
REGULATION M-A
ITEM 1011
Additional information as set forth in the Proxy Statement, including
the Annexes thereto, and the information set forth in the section of the Proxy
Statement entitled "Certain Legal Matters and Regulatory Approvals - Litigation"
is incorporated herein by reference in its entirety.
ITEM 16. EXHIBITS.
REGULATION M-A
ITEM 1016
(a) Preliminary Proxy Statement on Schedule 14A filed with the
Securities and Exchange Commission on September 15, 2003 and incorporated herein
by reference.
(c)(1) Opinion Letter, dated as of July 21, 2003, from Adams,
Harkness & Hill, Inc. to the Independent Committee of the Board of Directors of
the Company (incorporated herein by reference to Annex B to the Proxy Statement)
(c)(2) Fairness Opinion Presentation, dated as of July 21, 2003,
prepared by Adams, Harkness & Hill, Inc.
(d)(1) Agreement and Plan of Merger, dated as of July 21, 2003, by
and among Acquisition Company, Parent LLC and the Company (incorporated herein
by reference to Annex A to the Proxy Statement)
(d)(2) Form of Voting Agreement, dated as of July 21, 2003, by and
between the Company and the Stockholder (incorporated herein by reference to
Annex E to the Proxy Statement)
(d)(3) Form of Indemnification Agreement, dated as of July 21, 2003,
by and between the Company and the Indemnitee (incorporated herein by reference
to Annex F to the Proxy Statement)
(f) Sections 85 through 98 of Chapter 156B of the General Laws of
the Commonwealth of Massachusetts (incorporated herein by reference to Annex G
to the Proxy Statement)
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SIGNATURES
After due inquiry and to the best of its or his knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: September 15, 2003
ATLANTIC DATA SERVICES, INC.
By: /s/ Robert W. Howe
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Robert W. Howe, Chief Executive Officer
ADS ACQUISITION COMPANY LLC
By: /s/ Robert W. Howe
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Robert W. Howe, Manager
ADS PARENT ACQUISITION LLC
By: /s/ Robert W. Howe
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Robert W. Howe, Manager
/s/ Robert W. Howe
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Robert W. Howe
/s/ William H. Gallagher
-------------------------------------------
William H. Gallagher
/s/ Lee M. Kennedy
-------------------------------------------
Lee M. Kennedy
GENERAL ATLANTIC PARTNERS, LLC
By: /s/ Matthew Nimetz
---------------------------------------
Matthew Nimetz
A Managing Member
GENERAL ATLANTIC PARTNERS II, L.P.
By: General Atlantic Partners, LLC,
Its general partner
By: /s/ Matthew Nimetz
---------------------------------------
Matthew Nimetz
A Managing Member
GAP COINVESTMENT PARTNERS, L.P.
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By: /s/ Matthew Nimetz
---------------------------------------
Matthew Nimetz
A General Partner
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EXHIBIT INDEX
(a) Preliminary Proxy Statement on Schedule 14A filed with the
Securities and Exchange Commission on September 15, 2003 and incorporated
herein by reference.
(c)(1) Opinion Letter, dated as of July 21, 2003, from Adams,
Harkness & Hill, Inc. to the Independent Committee of the Board of Directors of
the Company (incorporated herein by reference to Annex B to the Proxy Statement)
(c)(2) Fairness Opinion Presentation, dated as of July 21, 2003,
prepared by Adams, Harkness & Hill, Inc.
(d)(1) Agreement and Plan of Merger, dated as of July 21, 2003, by
and among Acquisition Company, Parent LLC and the Company (incorporated herein
by reference to Annex A to the Proxy Statement)
(d)(2) Form of Voting Agreement, dated as of July 21, 2003, by and
between the Company and the Stockholder (incorporated herein by reference to
Annex E to the Proxy Statement)
(d)(3) Form of Indemnification Agreement, dated as of July 21, 2003,
by and between the Company and the Indemnitee (incorporated herein by reference
to Annex F to the Proxy Statement)
(f) Sections 85 through 98 of Chapter 156B of the General Laws of
the Commonwealth of Massachusetts (incorporated herein by reference to Annex G
to the Proxy Statement)
8