Item
1.
|
Security
and Issuer.
|
This
statement on Schedule 13D (this “
Statement
”) relates
to the shares of common stock, $0.01 par value per share (“
Common Stock
”), of
QuadraMed Corporation, a Delaware corporation (the “
Issuer
”). The
principal executive offices of the Issuer are located at 12110 Sunset Hills
Road, Suite 600, Reston, Virginia 20190.
Item
2.
|
Identity
and Background.
|
(a) This Statement is being filed
jointly by the following (each a “
Reporting Person
” and
collectively, the “
Reporting
Persons
”): (1) Bavaria Holdings Inc., a Delaware corporation
(“
Parent
”), (2)
Francisco Partners II, L.P., a Delaware limited partnership (“
FPII
”), (3) Francisco
Partners Parallel Fund II, L.P., a Delaware limited partnership (“
FPPII
”), (4)
Francisco Partners GP II, L.P., a Delaware limited partnership (“
FPGPII
”), and (5)
Francisco Partners GP II Management, LLC, a Delaware limited liability company
(“
FPMII
”). The
agreement among the Reporting Persons relating to the joint filing of this
statement is attached as Exhibit 99.1 hereto.
(b) The business address for each of
the Reporting Persons is One Letterman Drive, Building C – Suite 410, San
Francisco, California 94129.
(c) The principal business of Parent is
to serve as a holding company of the Issuer after the Merger (as defined
below).
The principal business of each of FPII
and FPPII is to invest directly or indirectly in various
companies. FPII and FPPII collectively hold 100% of the outstanding
stock of Parent.
The principal business of FPGPII is to
serve as the general partner of various limited partnerships, including FPII and
FPPII.
The principal business of FPMII is to
serve as general partner of FPGPII and to provide management services to FPII
and FPPII at the request of FPGPII.
Mr. Ezra Perlman and Mr. Chris Adams
are the sole executive officers and directors of Parent and each has a business
address of One Letterman Drive, Building C – Suite 410, San Francisco,
California 94129.
The Managing Directors of FPGPII and
Members of FPMII are Mr. David M, Stanton, Mr. Benjamin H. Ball, Mr. Dipanjan
Deb, Mr. Neil M. Garfinkel, Mr. Keith Geeslin, Mr. David Golob and Mr.
Perlman. The business address of Messrs. Stanton, Ball, Deb,
Garfinkel, Geeslin, Golob and Perlman is One Letterman Drive, Building C – Suite
410, San Francisco, California 94129.
(d) During the last five years, none of
the Reporting Persons, and to the knowledge of the Reporting Persons, none of
the other persons listed in this Item 2, has been convicted in any criminal
proceeding (excluding traffic violations and similar misdemeanors).
(e) During the last five years, none of
the Reporting Persons, and to the knowledge of the Reporting Persons, none of
the other persons listed in this Item 2, has been party to any civil proceeding
of a judicial or administrative body of competent jurisdiction as a result of
which such person was or is subject to any 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 Parent, FPII,
FPPII, FPGPII, and FPMII is organized under the laws of the State of
Delaware.
Each of Messrs. Perlman, Adams, Stanton, Ball, Deb,
Garfinkel, Geeslin and Golob is a United States citizen.
Item
3.
|
Source
and Amount of Funds or Other
Consideration.
|
On December 7, 2009, the Issuer, Parent
and Bavaria Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary
of Parent (“
Merger
Sub
”), entered into an Agreement and Plan of Merger (the “
Merger Agreement
”),
pursuant to which, subject to the satisfaction or waiver of the conditions
therein, Merger Sub will merge with and into the Issuer (the “
Merger
”) and the
Issuer will become a wholly-owned subsidiary of Parent. Pursuant to
the Merger Agreement, at the effective time of the Merger, other than shares
owned directly or indirectly by the Issuer as treasury stock or by Parent,
Merger Sub or any other subsidiary of Parent or the Issuer, and shares for which
appraisal rights have been properly asserted and not withdrawn, (i) each issued
and outstanding share of Common Stock of the Issuer will be cancelled and
automatically converted into the right to receive $8.50 in cash, without
interest, and (ii) each issued and outstanding share of Series A Cumulative
Mandatory Convertible Preferred Stock of the Issuer (the “
Series A Preferred
Stock
”), to the extent not converted by its holder prior to the effective
time of the Merger, will be cancelled and automatically converted into the right
to receive $13.7097 in cash, without interest.
Wells Fargo Foothill, LLC and Silicon
Valley Bank (collectively, the “
Lenders
”) provided a
Senior Secured Credit Facility Commitment Letter dated December 7, 2009 (the
“
Debt Commitment
Letter
”) to FPII, pursuant to which the Lenders, subject to the terms and
conditions therein, committed to provide an aggregate of $60,000,000 in debt
financing following the closing of the Merger, which financing will be used for
the purpose of funding a portion of the consideration payable in connection with
the Merger, to refinance certain existing indebtedness of the Issuer, to finance
working capital, capital expenditures and for general corporate purposes for the
operation of the Issuer following the closing of the Merger, and to pay certain
fees and expenses associated with the Debt Commitment Letter and the
Merger. While FPII has obtained the Debt Commitment Letter to provide
financing for the transactions contemplated by the Merger Agreement,
consummation of the Merger is not subject to a financing condition.
Pursuant to the Merger Agreement, upon
the consummation of the Merger the Issuer is required to have on a consolidated
basis cash and marketable securities totaling at least $15,000,000, of which not
less than $7,500,000 shall be in cash, all of which needs to be held in bank or
brokerage accounts in the United States (other than up to $2,000,000 in cash
which may be held in operating accounts of certain of the Issuer’s foreign
subsidiaries).
The proceeds from the financing
contemplated by the Debt Commitment Letter, together with the Issuer’s available
cash at the closing of the Merger and equity funding expected to be contributed
to Parent by FPII and FPPII in an amount of not less than $65,000,000, will be
used to fund the aggregate merger consideration and to pay all related fees and
expenses.
The Voting Agreements (as defined
below) described in Item 4 of this Schedule 13D were entered into by Parent and
each of the Stockholders (as defined below), each of whom is an executive
officer and/or director of the Issuer. The Stockholders entered into
their respective Voting Agreements as an inducement to Parent to enter into the
Merger Agreement. Parent did not pay additional consideration to the
Stockholders in connection with the execution and delivery of their respective
Voting Agreements and thus no funds were used for such purpose.
The foregoing descriptions of the
Merger Agreement, the Debt Commitment Letter, and the Voting Agreements do not
purport to be complete and are qualified in their entirety by reference to such
agreements, each of which is incorporated by reference in its entirety into this
Item 3. Copies of the Merger Agreement, the Debt Commitment Letter,
and the form of Voting Agreement, are filed as Exhibits 99.2, 99.3 and 99.4,
respectively, hereto.
Item
4.
|
Purpose
of Transaction.
|
This Schedule 13D is being filed in
connection with the Merger Agreement and the Voting Agreements and the
transactions contemplated thereby. The description of those
agreements in Item 3, along with the description of the Debt Commitment Letter,
are incorporated herein by reference.
Pursuant to the Merger Agreement, at
the effective time of the Merger, other than shares owned directly or indirectly
by the Issuer as treasury stock or by Parent, Merger Sub or any other subsidiary
of Parent or the Issuer, and shares for which appraisal rights have been
properly asserted and not withdrawn, (i) each issued and outstanding share of
Common Stock of the Issuer will be cancelled and automatically converted into
the right to receive $8.50 in cash, without interest, and (ii) each issued and
outstanding share of Series A Preferred Stock of the Issuer, to the extent not
converted by its holder prior to the effective time of the Merger, will be
cancelled and automatically converted into the right to receive $13.7097 in
cash, without interest. All shares of Common Stock or Series A
Preferred Stock held by the Issuer as treasury stock or owned by Parent, Merger
Sub or any other subsidiary of Parent or the Issuer immediately prior to the
effective time of the Merger shall be cancelled, and no payment shall be
made. In addition, all options to purchase shares of Common Stock
(the “
Stock
Options
”) granted under
any stock option or
compensation plan or agreement of the Issuer
outstanding immediately
prior to the effective time of the Merger, whether vested or unvested, shall be
cancelled at the effective time of the Merger and thereafter shall represent the
right to receive, in full satisfaction of the rights of the holder with respect
thereto, an amount in cash equal to
the difference between
$8.50 and the exercise price of such Stock Option multiplied by the number of
shares subject to such Stock Option
.
Following the consummation of the
Merger pursuant to the terms of the Merger Agreement: (a) the Issuer will be
wholly-owned by Parent; (b) Messrs. Perlman and Adams,
the directors and officers
of Merger Sub, will serve as the directors and officers of the Issuer until
their successors are duly elected or appointed and qualified in accordance with
applicable law
; (c) the bylaws of Merger Sub shall be the bylaws of the
Issuer
until amended
in accordance with applicable law
; and (d) the Issuer’s certificate of
incorporation will remain in effect until
amended in accordance with
applicable law
.
Following the Merger, the Common Stock
will no longer be listed on the Nasdaq Global Market, there will be no public
market for the Common Stock and registration of the Common Stock under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), will
be terminated.
Contemporaneously with the execution of
the Merger Agreement and as an inducement to Parent to enter into the Merger
Agreement, each of Michael J. Simpson, William K. Jurika, James E. Peebles,
Brook A. Carlon, Robert L. Pevenstein, David L. Piazza, Robert W. Miller,
Lawrence P. English and Duncan W. James (the “
Stockholders
” or
individually, a “
Stockholder
”), each
of whom is an executive officer and/or director of the Issuer, entered into
voting agreements with Parent (the “
Voting
Agreements
”), pursuant to which each Stockholder agreed to
vote: (i) in favor of adoption and approval of the Merger Agreement and the
transactions contemplated thereby, and any actions required in furtherance
thereof, and (ii) against any proposal that is intended, or could reasonably be
expected to, impede, interfere with, delay, postpone, discourage, frustrate or
adversely affect the consummation of the Merger and other transactions
contemplated by the Merger Agreement, and against any Acquisition Proposal (as
defined in the Merger Agreement). Pursuant to the Voting Agreements,
each Stockholder also granted to Parent a proxy to vote the Common Stock owned
by such Stockholder, as well as any and all other shares of Common Stock which
such Stockholder may own of record after the date of the Voting Agreement to
which such Stockholder is a party, with respect to any of the foregoing matters
at any meeting of the stockholders of the Issuer and in any action by written
consent of the stockholders of the Issuer. Pursuant to the Voting
Agreements, each Stockholder has also agreed (a) not to transfer any of its
shares of Common Stock or make any offer to transfer any of its shares of Common
Stock, (b) not to make any press release or public announcement with respect to
the business or affairs of the Issuer, the Issuer’s subsidiaries, Parent or
Merger Sub without the prior written consent of Parent, (c) to waive any rights
of appraisal or any dissenters’ rights pursuant to Section 262 of the
General Corporation Law of the State of Delaware and any similar rights, in each
case to the extent relating to the Merger or any related transaction, and (d)
not to enter into any other agreement inconsistent with the terms and conditions
of the Voting Agreement or related proxy, or that addresses any of the subject
matters addressed in the Voting Agreement and related proxy. Each
Voting Agreement expires upon the earliest to occur of (i) such date and time as
the Merger shall become effective in accordance with the terms of the Merger
Agreement, (ii) such date and time as the Merger Agreement shall have been
terminated in accordance with its terms, or (iii) such date and time as written
notice has been provided by Parent to the Stockholder of the termination of the
Voting Agreement.
The foregoing descriptions of the
Merger Agreement and the Voting Agreements do not purport to be complete and are
qualified in their entirety by reference to such agreements, each of which is
incorporated by reference in its entirety into this Item 4. Copies of
the Merger Agreement and the form of Voting Agreement are filed as Exhibits 99.2
and 99.4, respectively hereto.
Item
5.
|
Interest
in Securities of the Issuer.
|
(a-b) The following disclosure
assumes there are 8,307,277 shares of Common Stock outstanding, which the Issuer
represented in the Merger Agreement to be the number of shares outstanding as of
December 7, 2009. The following disclosure also assumes that the
Stockholders beneficially own 1,222,348 shares of Common Stock, which is the
number of shares of Common Stock, including shares of Common Stock issuable
pursuant to Stock Options, that the Reporting Persons believe the Stockholders
beneficially own based on the representations of the Stockholders in their
respective Voting Agreements and information provided by the
Issuer.
As a result of the Voting Agreements,
the Reporting Persons have shared voting power with respect to, and may be
deemed to beneficially own, the 1,222,348 shares of Common Stock beneficially
owned by the Stockholders (which includes shares of Common Stock issuable
pursuant to Stock Options that the Reporting Persons believe the Stockholders
beneficially own based on the representations of the Stockholders in their
respective Voting Agreements and information provided by the Issuer), which
represents for the purposes of Rule 13d-3, promulgated under the Exchange Act,
13.8% of the issued and outstanding shares of Common Stock as of December 7,
2009 (assuming, pursuant to Rule 13d-3, the exercise or conversion of the Stock
Options the Stockholders represented they beneficially own in their respective
Voting Agreements). Of the 1,222,348 shares of Common Stock
beneficially owned by the Stockholders, 663,444 shares are issued and
outstanding as of December 7, 2009, representing 7.99% of the issued and
outstanding shares of Common Stock as of December 7, 2009, and the remainder of
such shares represent shares of Common Stock issuable pursuant to Stock Options
that vest according to their terms within 60 days of the date of this Schedule
13D. The Reporting Persons have no dispositive power with respect to,
and hereby disclaim beneficial ownership of, any shares of Common Stock that may
be beneficially owned by the Stockholders and their respective
affiliates. Neither the filing of this statement or any of its
contents shall be deemed to constitute an admission that the Reporting Persons
or any of their affiliates is the beneficial owner of any shares of Common Stock
for the purposes of Section 13(d) of the Exchange Act or for any other purpose
or that the Reporting Persons have an obligation to file this
statement.
Except as set forth in this Item 5(a),
none of the Reporting Persons beneficially owns any shares of Common
Stock.
(c) Except as described in this
Schedule 13D, no transactions in the Common Stock have been effected during the
past 60 days by any Reporting Person.
(d) To the knowledge of the Reporting
Persons, no other persons besides the Stockholders and those persons for whose
shares of Common Stock the Stockholders report beneficial ownership have the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the securities of the Issuer reported
herein.
(e) Not applicable.
Except as set forth above, to the
knowledge of the Reporting Persons, none of the other persons listed in Item 2
above has beneficial ownership of any shares of Common Stock.
Item
6.
|
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer.
|
The responses set forth in Items 3, 4
and 5 of this Statement are incorporated herein by reference.
Except for the agreements described in
Items 3, 4 and 5 above, to the knowledge of the Reporting Persons, there are no
contracts, arrangements, understandings or relationships (legal or otherwise),
including, but not limited to, transfer or voting of any of the securities,
finder’s fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or losses, or the giving or
withholding of proxies, between the Reporting Persons, and any other person,
with respect to any securities of the Issuer, including any securities pledged
or otherwise subject to a contingency the occurrence of which would give another
person voting power or investment power over such securities other than standard
default and similar provisions contained in loan agreements.