UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
(Name of Issuer)
Common
Stock, $0.01 par value per share
Series C-1 Preferred Stock, $0.01 par value per share
Series D Preferred Stock, $0.01 par value per share
(Title of Class of Securities)
(CUSIP Number)
Kirkland
& Ellis LLP
555 California Street
San Francisco, CA 94104
Attn: Gary M. Holihan, P.C.
Jeremy M. Veit
(415) 439-1400
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.
o
Note:
Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
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1
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NAMES OF REPORTING PERSONS
Steel Holdings, Inc.
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a)
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(b)
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS (SEE INSTRUCTIONS)
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OO
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5
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Delaware
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7
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SOLE VOTING POWER
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NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
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None
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8
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SHARED VOTING POWER
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1,958,087 shares of Common Stock;
15,000 shares of Series C-1 Preferred Stock;
5,000 shares of Series D Preferred Stock (see Item 5)
1
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9
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SOLE DISPOSITIVE POWER
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None
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10
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SHARED DISPOSITIVE POWER
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None
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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1,958,087 shares of Common Stock; 15,000
shares of Series C-1 Preferred Stock;
5,000 shares of Series D Preferred Stock (see Item 5)
1
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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4.4% of Common Stock; 83.3% of
Series C-1 Preferred Stock;
83.3% of Series D Preferred Stock (see Item 5)
2
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14
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
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CO, HC
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1
Represents the aggregate number of
outstanding shares of Common Stock, Series C-1 Preferred Stock and Series D Preferred
Stock beneficially owned by ABRY Mezzanine Partners, L.P. and ABRY Partners, LLC, each of
whom entered into a Voting Agreement dated June 11, 2009 with Steel Holdings, Inc. obligating the
holder to, among other things, vote such shares in favor of the proposed acquisition of
SoftBrands, Inc. by Steel Holdings, Inc. pursuant to the Merger Agreement (as defined in Item 3).
See Items 3, 4 and 5.
2
The shares of Common
Stock, Series C-1 Preferred Stock and Series D Preferred Stock vote
together as a single class, with the Series C-1 Preferred Stock and
Series D Preferred Stock voting on an as-converted to Common Stock
basis. As disclosed in SoftBrands’
Proxy Statement on Form DEF 14A filed on January 12, 2009, as of
December 31, 2008, the Series C-1 Preferred Stock and Series D Preferred Stock
reported herein represented the right to vote 10,456,699 shares of Common Stock.
Collectively, the shares of Common Stock, Series C-1 Preferred Stock and Series D Preferred
Stock reported herein represented the right to vote 12,414,786 shares of Common Stock, or
approximately 20% of the total outstanding shares of Common Stock on an as-converted basis.
2
The information set forth in response to each separate Item below shall be deemed to be a response
to all Items where such information is relevant.
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
”), shares of Series C-1 Preferred Stock,
$0.01 par value per share (“
Series C-1 Preferred Stock
”), and shares of Series D Preferred
Stock, $0.01 par value per share (“
Series D Preferred Stock
”), of SoftBrands, Inc., a
Delaware corporation (“
SoftBrands
”). The principal executive offices of SoftBrands are
located at 800 LaSalle Avenue, Suite 2100, Minneapolis, MN 55402.
Item 2. Identity and Background.
This Statement is filed by Steel Holdings, Inc., a Delaware corporation (“
Steel
Holdings
”). The principal business address for Steel Holdings is c/o Golden Gate Private
Equity, Inc., One Embarcadero Center, 39th Floor, San Francisco, CA 94111. Steel Holdings was
formed solely for the purpose of acquiring SoftBrands and has not engaged in any business except
for activities incidental to its formation, in connection with the financing of the merger
consideration and as otherwise contemplated by the Merger Agreement (defined below). The
following are the directors and executive officers of Steel Holdings: David Dominik is the
President and sole Director and John Gilligan is the Vice President and Secretary. David Dominik
and John Gilligan are both U.S. citizens.
During the last five years, neither Steel Holdings, nor, to Steel Holdings’ knowledge, either
of the individuals referred to above, has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction resulting in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject to, federal or state
securities laws, or finding violations with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
SoftBrands and Steel Holdings have entered into an Agreement and Plan of Merger, dated as of
June 11, 2009 (the “
Merger Agreement
”) pursuant to which Steel Holdings has agreed to
acquire all of the outstanding Common Stock of SoftBrands for $0.92 per share in cash, without
interest, representing an equity value for Common Stock of approximately $43.6 million in the
aggregate. In addition, pursuant to the Merger Agreement, outstanding shares SoftBrands’ preferred
stock will be purchased or redeemed for cash, which would represent, calculated as of the date of
the Merger Agreement, approximately an additional $29.5 million.
As an inducement for Steel Holdings to enter into the Merger Agreement with SoftBrands, and in
consideration thereof, certain stockholders of SoftBrands entered into Voting Agreements, dated as
of June 11, 2009, with Steel Holdings (the “
Voting Agreements
”). The names of such
stockholders and number of shares of Common Stock, Series C-1 Preferred Stock and Series D
Preferred Stock owned by each is set forth in
Exhibit 99.2
. Such stockholders
(collectively, the “
Voting Holders
”) hold 1,958,087 shares of Common Stock, 15,000 shares
of Series C-1 Preferred Stock and 5,000 shares of Series D Preferred Stock, which collectively
3
represent, on an as-converted Common Stock basis, approximately 20% of the shares of Common Stock
deemed to be outstanding.
The Voting Holders have agreed that until the termination of the Voting Agreements, each such
Voting Holder will vote all shares of Common Stock, Series C-1 Preferred Stock and Series D
Preferred Stock owned by such Voting Holders in favor of the approval and adoption of the Merger
Agreement. For a description of the Voting Agreements see Item 4 below, which description is
incorporated herein by reference in response to this Item 3.
Steel Holdings did not pay additional consideration to the Voting Holders in connection with
the execution and delivery of the Voting Agreements. The descriptions of the Merger Agreement and
the Voting Agreements contained in this Schedule 13D are qualified in their entirety by reference
to such agreements, copies of which appear as
Exhibit 99.1
and
Exhibit 99.2
hereto,
respectively.
Item 4. Purpose of Transaction.
As stated above, the Voting Agreements were entered into as an inducement for, and in
consideration of, Steel Holdings’ entering into the Merger Agreement. Subject to the terms and
conditions thereof, the Merger Agreement provides for the merger (the “
Merger
”) of a wholly
owned subsidiary of Steel Holdings (“
Merger Sub
”) with and into SoftBrands. At the
effective time of the Merger, each outstanding share of Common Stock will be exchanged for $0.92 in
cash, representing an equity value of approximately $43.6 million in the aggregate, and SoftBrands’
outstanding shares of preferred stock will be purchased or redeemed for cash, which would represent
approximately, calculated as of the date of the Merger Agreement, an additional $29.5 million.
The Merger Agreement has been approved by the board of directors of each of SoftBrands and
Steel Holdings. The transaction is subject to approval by the holders of a majority in interest of
SoftBrands’ outstanding shares of Company Capital Stock (as such term is defined in the Merger
Agreement) and, subject to certain repurchase rights, the holders of a majority in interest of the
outstanding shares of SoftBrands’ Series B Preferred Stock, par value $0.01 per share. The
transaction is also subject to customary regulatory approvals and other closing conditions and is
expected to close in the third quarter of 2009.
Pursuant to the Voting Agreements entered into in connection with the Merger Agreement, the
Voting Holders, the beneficial owners of 1,958,087 shares of Common Stock, 15,000 shares of Series
C-1 Preferred Stock and 5,000 shares of Series D Preferred Stock, which collectively represent, on
an as-converted Common Stock basis, approximately 20% of the shares of Common Stock deemed to be
outstanding, have agreed to vote (or cause to be voted) all issued and outstanding securities of
SoftBrands owned of record or beneficially by each such shareholder: (a) in favor of the adoption
of the Merger Agreement and the transactions contemplated by the Merger Agreement; and (b) against
the following actions: (i) approval of any proposal made in opposition to or competition with
consummation of the Merger and the Merger Agreement, including any Acquisition Proposal (as such
term is defined in the Merger Agreement), (ii) any Acquisition Transaction (as such term is defined
in the Merger Agreement) with any party other than Steel Holdings or an affiliate of Steel Holdings
as contemplated by the
4
Merger Agreement, (iii) any other proposal that is intended to, or is reasonably likely to,
result in the conditions of Steel Holdings or Merger Sub’s obligations under the Merger Agreement
not being fulfilled, (iv) any amendment of SoftBrands’ certificate of incorporation or by-laws that
is not requested or expressly approved by Steel Holdings, and (v) any dissolution, liquidation or
winding up of SoftBrands. Pursuant to the Voting Agreements, each Voting Holder granted to Steel
Holdings and Merger Sub an irrevocable proxy and irrevocably appointed Steel Holdings and Merger
Sub such Voting Holder’s attorney and proxy to vote or, if applicable, to give consent with respect
to, all of such Voting Holder’s Common Stock, Series C-1 Preferred Stock and Series D Preferred
Stock subject to the Voting Agreements, with regard to any of the matters referred to in the
immediately preceding sentence.
In addition, the Voting Holders cannot (a) transfer, assign, sell, gift-over, pledge or
otherwise dispose of, or consent to any of the foregoing, any or all of the shares subject to the
Voting Agreements or any right or interest therein (“
Transfer
”); provided, however, such
restrictions shall not be applicable to (i) a gift of the shares made to the Voting Holder’s spouse
or issue, including adopted children, or to a trust for the exclusive benefit of the Voting Holder
or the Voting Holder’s spouse or issue, provided such transferee agrees to be bound by the terms of
the Voting Agreements or (ii) a transfer of title to the shares effected pursuant to the Voting
Holder’s will or the laws of intestate succession; (b) enter into any contract, option or other
agreement, arrangement or understanding with respect to any Transfer; (c) grant any proxy,
power-of-attorney or other authorization or consent with respect to any of the shares subject to
the Voting Agreements (other than the proxy contemplated in Section 3 of the Voting Agreements); or
(d) deposit any of the shares subject to the Voting Agreements into a voting trust, or enter into a
voting agreement or arrangement with respect to any of the shares subject to the Voting Agreements.
The Voting Agreements expire on the earlier of: (i) such time as the Merger Agreement is
terminated in accordance with its terms or (ii) such time as the Merger becomes effective.
The purpose of the Voting Agreements is to enable Steel Holdings and SoftBrands to consummate
the transactions contemplated by the Merger Agreement.
Upon the consummation of the Merger, the directors and officers of Merger Sub immediately
prior to the effective time of the Merger shall be the directors and officers, respectively, of the
surviving corporation immediately following the effective time of the Merger, and shall hold office
until their respective successors are duly elected and qualified, or their earlier death,
resignation or removal, in accordance with applicable law and the certificate of incorporation and
bylaws of the surviving corporation.
At the effective time of the Merger, the certificate of incorporation and by-laws of
SoftBrands shall be amended as set forth in Section 2.5 of the Merger Agreement.
If the Merger is consummated as planned, Steel Holdings anticipates that SoftBrands will
become a wholly owned subsidiary of Steel Holdings and that Steel Holdings will seek to cause the
Common Stock to be deregistered under the Exchange Act and the Securities Act of 1933, as amended,
and delisted from the NYSE Amex.
Except as set forth in this Item 4, neither Steel Holdings nor, to Steel Holdings’ knowledge,
any of the individuals referred to in Item 2 of this Statement, has any plans or
5
proposals which relate to or would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D. Steel Holdings or any of the individuals referred to in
Item 2 of this Statement may determine at a future date to adopt plans or intentions different from
those set forth herein, to the extent permitted by the Merger Agreement.
The foregoing summary of certain provisions of the Merger Agreement and the Voting Agreements
is not intended to be complete and is qualified in its entirety by reference to the full text of
such agreements.
Item 5. Interest in Securities of the Issuer.
(a)-(b)
As of the filing date of this Schedule 13D, as a result of the Voting Agreements,
Steel Holdings may be deemed to have (i) beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) and (ii) shared power to vote or direct the vote of 1,958,087 shares of
Common Stock, 15,000 shares of Series C-1 Preferred Stock and 5,000 shares of Series D Preferred
Stock, which collectively represent, on an as-converted Common Stock basis, approximately 20% of
the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1), subject to the
conditions and limitations of the Voting Agreements.
Steel Holdings has neither sole nor shared dispositive power over the shares of Common Stock,
Series C-1 Preferred Stock or Series D Preferred Stock subject to the Voting Agreements. Beneficial
ownership of the Common Stock, Series C-1 Preferred Stock or Series D Preferred Stock is being
reported hereunder solely because Steel Holdings may be deemed to have beneficial ownership of such
shares of Common Stock, Series C-1 Preferred Stock or Series D Preferred Stock as a result of Steel
Holdings’ right under the Voting Agreements to direct the voting of shares and to vote such shares
in accordance with irrevocable proxies. However, Steel Holdings does not control the voting of
such shares with respect to other matters and does not possess any other rights as a SoftBrands
stockholder with respect to such shares. Steel Holdings disclaims any beneficial ownership of such
shares of Common Stock, Series C-1 Preferred Stock or Series D Preferred Stock, and nothing herein
shall be deemed to be an admission by Steel Holdings as to the beneficial ownership of such shares
of Common Stock, Series C-1 Preferred Stock or Series D Preferred Stock for purposes of Section
13(d) of the Securities Exchange Act of 1934, or for any other purpose. The information contained
in Item 4 of this Statement is incorporated herein by reference.
All of the percentages calculated in this Statement are based upon an aggregate of 44,858,101
shares of Common Stock outstanding as of April 30, 2009, as disclosed in SoftBrands’ Quarterly
Report on Form 10-Q filed for the fiscal quarter ended March 31, 2009.
(c)
Except as set forth or incorporated herein, neither Steel Holdings nor, to Steel Holdings’
knowledge, any of the individuals referred to Item 2 of this Statement, has effected any
transaction in any shares of Common Stock, Series C-1 Preferred Stock or Series D Preferred Stock
of SoftBrands during the past 60 days.
(d)
Not applicable.
(e)
Not applicable.
6
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the
Issuer.
Other than the Merger Agreement and the Voting Agreements, to the knowledge of Steel Holdings,
there are no contracts, arrangements, understandings or relationships (legal or otherwise) among
the persons named in Item 2 of this Statement or between such persons and any other person with
respect to the securities of SoftBrands, 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 loss, or the giving or withholding of proxies. The
information set forth, or incorporated by reference, in Items 3 through 5 of this statement is
hereby incorporated by reference in this Item 6.
Item 7. Material to be Filed as Exhibits.
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99.1.
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Agreement and Plan of Merger, dated June 11, 2009, by and among
Steel Holdings, Inc., Steel Merger Sub, Inc. and SoftBrands, Inc.
(incorporated by reference to Exhibit 2.1 to the Current Report on
Form 8-K filed by SoftBrands, Inc. on June 12, 2009 (File No.
001-32711)).
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99.2.
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Voting Agreements, dated June 11, 2009, by and Steel Holdings, Inc.
and Steel Merger Sub, Inc., on the one hand, and each of ABRY
Mezzanine Partners, L.P. and ABRY Partners, LLC. (incorporated by
reference to Exhibit 2.2 to the Current Report on Form 8-K filed by
SoftBrands, Inc. on June 12, 2009 (File No. 001-32711)).
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7
After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the
undersigned certifies that the information set forth in this Statement is true, complete and
correct.
Dated:
June 19, 2009
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Steel Holdings, Inc.
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By:
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/s/
John Gilligan
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Name:
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John Gilligan
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Title:
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Vice President and Secretary
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8
INDEX TO EXHIBITS
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Exhibit
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Number
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Document
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99.1.
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Agreement and Plan of Merger, dated June 11,
2009, by and among Steel Holdings, Inc., Steel
Merger Sub, Inc. and SoftBrands, Inc.
(incorporated by reference to Exhibit 2.1 to the
Current Report on Form 8-K filed by SoftBrands,
Inc. on June 12, 2009 (File No. 001-32711)).
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99.2.
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Voting Agreements, dated June 11, 2009, by and
Steel Holdings, Inc. and Steel Merger Sub, Inc.,
on the one hand, and each of ABRY Mezzanine
Partners, L.P. and ABRY Partners, LLC.
(incorporated by reference to Exhibit 2.2 to the
Current Report on Form 8-K filed by SoftBrands,
Inc. on June 12, 2009 (File No. 001-32711)).
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