sc13dza

0000950133-07-002464.txt : 20070525 0000950133-07-002464.hdr.sgml : 20070525 20070525170132 ACCESSION NUMBER: 0000950133-07-002464 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20070525 DATE AS OF CHANGE: 20070525 GROUP MEMBERS: JEFFREY D. ZIENTS SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PEDIATRIC SERVICES OF AMERICA INC CENTRAL INDEX KEY: 0000893430 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 581873345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44129 FILM NUMBER: 07881257 BUSINESS ADDRESS: STREET 1: 31O TECHNOLOGY PKWY CITY: NORCROSS STATE: GA ZIP: 30092-2929 BUSINESS PHONE: 7704411580 MAIL ADDRESS: STREET 1: 310 TECHNOLOGY PKWY CITY: NORCROSS STATE: GA ZIP: 30092-2929 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Portfolio Logic LLC CENTRAL INDEX KEY: 0001301467 IRS NUMBER: 320092779 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 600 NEW HAMPSHIRE AVENUE, NW STREET 2: 8TH FLR CITY: WASHINGTON STATE: DC ZIP: 20037 BUSINESS PHONE: 202-672-5751 MAIL ADDRESS: STREET 1: 600 NEW HAMPSHIRE AVENUE, NW STREET 2: 8TH FLR CITY: WASHINGTON STATE: DC ZIP: 20037 FORMER COMPANY: FORMER CONFORMED NAME: Theory Capital LLC DATE OF NAME CHANGE: 20040825 SC 13D/A 1 w35517sc13dza.htm AMENDMENT NO. 7 TO SCHEDULE 13D sc13dza


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934
(Amendment No. 7 )*

Pediatric Services of America, Inc.

(Name of Issuer)

Common Shares, $0.01 par value

(Title of Class of Securities)

705323103

(CUSIP Number)

Jennifer Nance, 600 New Hampshire Avenue, NW, Washington, DC 20037, (202) 266-7900

Copy to:
Gregory V. Gooding, Esq., Debevoise & Plimpton LLP, 919 Third Avenue, New York, NY 10022

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

May 25, 2007

(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 §240.13d-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).

(Continued on following pages)

Schedule 13D/A


CUSIP No.		705323103

NAMES OF REPORTING PERSONS:

Portfolio Logic LLC

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

32-0092779

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ*

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

WC, OO

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

Delaware

SOLE VOTING POWER:

NUMBER OF

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

1,090,918**

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER:

1,090,918**

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

1,090,918**

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

þ**

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

14.4%**,***

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):

* Portfolio Logic LLC and Jeffrey D. Zients (the “Reporting Persons”) may be deemed to be part of a group, and to share beneficial ownership, with the D3 Filing Parties (as defined in Item 2 of this Statement) as a result of the non-binding Memorandum of Understanding described in Item 4 of this Statement. The Reporting Persons expressly disclaim any beneficial ownership of the shares of Common Stock held by the D3 Filing Parties.

** Does not include 1,453,444 shares of Common Stock that are beneficially owned by the D3 Filing Parties, as reported in Amendment No. 23 to the statement on Schedule 13D, dated April 29, 2007, filed by the D3 Filing Parties. The Reporting Persons expressly disclaim any beneficial ownership of the shares of Common Stock held by the D3 Filing Parties.

*** Based on 7,575,913 shares of Common Stock outstanding as of May 18, 2007, as set forth on the cover page of the Issuer’s preliminary proxy statement on Schedule 14A, filed May 25, 2007.


CUSIP No.		705323103

NAMES OF REPORTING PERSONS:

Jeffrey D. Zients

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):

(a) o

(b) þ*

SEC USE ONLY:

SOURCE OF FUNDS (SEE INSTRUCTIONS):

WC, OO

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):

CITIZENSHIP OR PLACE OF ORGANIZATION:

United States

SOLE VOTING POWER:

NUMBER OF

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

1,090,918**

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER:

1,090,918**

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

1,090,918**

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):

þ**

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

14.4%**,***

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):

*** Based on 7,575,913 shares of Common Stock outstanding as of May 18, 2007, as set forth on the cover page of the Issuer’s preliminary proxy statement on Schedule 14A, filed May 25, 2007.

This Statement constitutes Amendment No. 7 to the Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on August 31, 2004 (as amended, the “Schedule 13D”). This Schedule 13D/A relates to the Common Stock, par value $0.01 per share (the “Common Stock”), of Pediatric Services of America, Inc., a Delaware corporation (the “Issuer”). This Schedule 13D/A is being filed jointly pursuant to Rule 13d-1(k)(1) of Regulation 13D-G of the Act on behalf of Portfolio Logic LLC, a Delaware limited liability corporation (“Portfolio Logic”), and Jeffrey D. Zients, an individual (collectively, the “Reporting Persons”). Based on his relationship with Portfolio Logic, as described in the Schedule 13D, Mr. Zients is deemed to be a beneficial owner of the Common Stock owned by Portfolio Logic for purposes of Section 13(d).

Other than as set forth herein, there has been no material change in the information set forth in the Schedule 13D. Capitalized terms used and not defined in this Amendment have the meanings given to them in the Schedule 13D.

Item 2. Identity and Background.

Item 2 of Schedule 13D is hereby amended to add the following immediately after the last paragraph thereof:

As a result of the non-binding Memorandum of Understanding described in Item 4 of this Statement, the Reporting Persons may be deemed to be part of a group and to share beneficial ownership, for purposes of Rule 13d-5(b)(1) under the Act, with The D3 Family Fund, L.P., The DIII Offshore Fund, L.P., The D3 Family Bulldog Fund L.P., Nierenberg Investment Management Company, Inc., and Nierenberg Investment Management Offshore Inc. (the “D3 Filing Parties”). This Schedule 13D constitutes a separate filing by the Reporting Persons in accordance with Rule 13d-1(k)(2) under the Act. None of the D3 Filing Parties is a reporting person for purposes of this Schedule 13D, and the D3 Filing Parties are filing a separate statement on Schedule 13D. The Reporting Persons expressly disclaim any beneficial ownership of the shares of Common Stock held by the D3 Filing Parties.

Item 3. Source and Amount of Funds or Other Consideration.

Item 3 of Schedule 13D is hereby amended and restated in its entirety to read as follows:

Between August 10, 2004 and June 9, 2006, Portfolio Logic acquired 1,090,918 shares of Common Stock for an aggregate purchase price of $10,900,891. The funds for the purchase of the shares of Common Stock held by Portfolio Logic came from its working capital. The working capital of Portfolio Logic may from time to time include the proceeds of margin loans entered into in the ordinary course of business, with such loans being secured by securities owned by Portfolio Logic.

As described in Item 4 of Amendment No. 6 to the Schedule 13D, dated April 25, 2007 (“Amendment No. 6”) (which Item 4 of Amendment No. 6 is incorporated by reference herein), on April 25, 2007, Portfolio Logic entered into an Agreement and Plan of Merger (the “Merger Agreement”), among Portfolio Logic, Pointer Acquisition Co., Inc., a Delaware corporation and wholly owned subsidiary of Portfolio Logic (“Merger Sub”) and the Issuer, as filed by the Issuer as Exhibit 2.1 of Form 8-K, dated April 25, 2007, which exhibit is incorporated by reference herein. The Reporting Persons estimate that the amount of funds that will be required to purchase all of the shares of outstanding Common Stock to be converted in the Merger into the right to

receive the Merger Consideration (as defined in Item 4 of Amendment No. 6), to settle outstanding, in-the-money options, to consummate the Merger and related transactions, and to pay related fees and expenses, will be approximately $135 million. These payments are expected to be funded by a combination of: (i) up to $25 million of debt financing; (ii) the “roll-over” of all of the shares Common Stock currently owned by Portfolio Logic and shares of the Issuer currently owned by the D3 Parties (as defined in Item 4 of Amendment No. 6) having a value, based on the Merger Consideration, of not less than $18 million and not more than $24 million; (iii) working capital of Portfolio Logic; and (iv) the Issuer’s available cash. The Reporting Persons currently expect that all other costs, expenses and liabilities of the Issuer arising out of or relating to the transaction shall be paid by the Issuer from cash available to the Issuer immediately prior to the consummation of the Merger.

Item 4. Purpose of Transaction.

The last four paragraphs of Item 4 are hereby amended and restated to read as follows:

As a result of discussions held between the Reporting Persons and the D3 Parties since the Reporting Persons filed Amendment No. 6, Portfolio Logic and the D3 Parties have entered into a non-binding Memorandum of Understanding, dated as of May 25, 2007 (the “Memorandum”). The Memorandum provides that prior to the closing of the Merger: (i) Portfolio Logic will form a new Delaware corporation (“Newco”) and will contribute to Newco all of the common shares of Merger Sub, together with the all of the shares of Common Stock currently owned by Portfolio Logic and an amount of cash to be determined; (ii) one or more of the D3 Parties will contribute to Newco shares of Common Stock having a value, based on the Merger Consideration, of not less than $18 million and not more than $24 million, such amount to be agreed upon by the D3 Parties and Portfolio Logic prior to the consummation of the Merger, which will result in the D3 Parties owning a minority interest in Newco; and (iii) Portfolio Logic and the D3 Parties will enter into a shareholders agreement that will provide that, among other things, Mr. Nierenberg will be elected to the board of directors of each of Newco and the Issuer following the consummation of the Merger.

There is no assurance that the D3 Parties will participate in the Merger as contemplated by the Memorandum. In the event that the D3 Parties do not so participate in the Merger, the Reporting Persons intend to consummate the Merger.

The foregoing is a summary of certain transactions and should not be construed as a solicitation of a proxy or an offer to purchase shares of Common Stock. Stockholders should read the Issuer’s proxy statements and other relevant documents regarding the Merger filed with the Commission as they become available because they contain and will contain important information relevant to the decision to approve the Merger. Stockholders will be able to receive these documents (as they become available), as well as other documents filed by the Reporting Persons or its affiliates with respect to the Merger, free of charge at the Commission’s web site, www.sec.gov.

Other than as set forth herein, in the Memorandum filed in Item 7 to this Statement and incorporated by reference to this Item 4, in the Merger Agreement and in the Schedule 13D, the Reporting Persons have no plans or proposals that relate to or would result in any of the events set forth in Items 4(a) through (j) of Schedule 13D. However, if the Merger is not consummated for any reason, the Reporting Persons intend from time to time to review their investment and may,

based on any such review, acquire beneficial ownership of additional Common Stock of other securities of the Issuer, including securities that may be convertible into or exercisable for Common Stock, cease to have beneficial ownership of Common Stock or explore another possible acquisition of the Issuer, in each case depending upon price, market conditions, discussions with management, availability of funds, evaluation of alternative investments and other factors.

The foregoing is qualified in its entirety by reference to the full text of each of: (i) the Merger Agreement; (ii) the Standstill Agreement (as defined in Amendment No. 6); (iii) the Rights Agreement, as amended (as defined in Amendment No. 6), as filed as set forth previously in this Statement; and (iv) the Memorandum.

Item 5. Interest in Securities of the Issuer.

Items 5(a) and 5(b) of the Schedule 13D are each hereby amended to add immediately following the last paragraph thereof the amended text of Item 2 of this Statement. As noted therein, the Reporting Persons expressly disclaim any beneficial ownership of the shares of Common Stock held by the D3 Filing Parties.

Item 6. Contracts, Arrangements, Understandings or Relationships with the Issuer.

Item 6 of the Schedule 13D is hereby amended so that the amended and restated text of Item 4 of this Statement is identically amended and restated in Item 6.

Item 7. Material to be Filed as Exhibits.

Exhibit 1: Memorandum of Understanding between Portfolio Logic and the D3 Parties dated as of May 25, 2007.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

PORTFOLIO LOGIC LLC

Dated May 25, 2007


		By:		Portfolio Logic Management LLC, Its Manager



	By:	/s/ Jeffrey D. Zients
		Jeffrey D. Zients, Manager

JEFFREY D. ZIENTS

Dated May 25, 2007



	By:	/s/ Jeffrey D. Zients
		Jeffrey D. Zients

EX-99.1 2 w35517exv99w1.htm EXHIBIT 1 exv99w1

Exhibit 1

MEMORANDUM OF UNDERSTANDING

This MEMORANDUM OF UNDERSTANDING, dated as of May 25, 2007 (this “MOU”) is made by and between (1) Portfolio Logic LLC, a Delaware limited liability company (“Portfolio Logic”), and (2) The D3 Family Fund, L.P., The DIII Offshore Fund, L.P., The D3 Family Bulldog Fund L.P., Nierenberg Investment Management Company, Inc., and Nierenberg Investment Management Offshore Inc. (collectively, the “D3 Entities”), and David Nierenberg (“Mr. Nierenberg” and, collectively with the D3 Entities, the “D3 Parties”).

WHEREAS, as of the date hereof, Portfolio Logic beneficially owns 1,090,918 shares of common stock of Pediatric Services of America, Inc., a Delaware corporation (“PSAI”), representing approximately 14.4% of the issued and outstanding common stock of PSAI;

WHEREAS, as of the date hereof, the D3 Entities beneficially own in the aggregate 1,453,444 shares of PSAI common stock, representing approximately 19.2% of the issued and outstanding PSAI common stock;

WHEREAS, Mr. Nierenberg is the President of the corporate general partners of the other D3 Entities and as such, is authorized to enter into this MOU on behalf of all the D3 Entities;

WHEREAS, on April 25, 2007, Portfolio Logic entered into an Agreement and Plan of Merger, dated as of April 25, 2007 (the “Merger Agreement”), among PSAI, Portfolio Logic and Pointer Acquisition Co., Inc., a wholly-owned subsidiary of Portfolio Logic (“Merger Sub”), providing for the acquisition by Portfolio Logic of all of the issued and outstanding common stock of PSAI not owned by Portfolio Logic at a price of $16.25 per share (the “Merger Consideration”) pursuant to a merger of Merger Sub with and into PSAI (the “Merger”) on the terms and subject to the conditions set forth in the Merger Agreement; and

WHEREAS, (a) on April 25, 2007, the Board of Directors of PSAI approved the Merger Agreement, the transactions contemplated by the Merger Agreement and the Exempted Transactions (as defined below) for purposes of the provisions of Section 203 of the General Corporation Law of the State of Delaware, with the intent that none of the foregoing should be subject to the requirements of said Section 203, (b) as of April 25, 2007, PSAI and Mellon Shareholder Services LLC, as Rights Agent, entered into the Second Amendment (the “Second Amendment to the Rights Agreement”) to PSAI’s Rights Agreement, dated as of September 22, 1998, (c) on April 29, 2007, PSAI and the D3 Entities entered into the First Amendment (the “First Amendment to the Standstill Agreement”) to the Standstill Agreement, dated as of February 18, 2005, among PSAI, certain of the D3 Parties and certain affiliated entities, and (d) the Second Amendment to the Rights Agreement and the First Amendment to the Standstill Agreement permit the D3 Parties to engage in discussions and negotiations with Portfolio Logic regarding their possible participation in the transactions contemplated by the Merger Agreement (through, among other things, equity investment or contribution of their shares of PSAI common stock and possible participation in the governance of PSAI following the Merger), as well as to reach, and if reached to effectuate, agreements, arrangements and understandings with Portfolio Logic regarding such possible participation, as well as certain related activities (the activities permitted by the Second Amendment to the Rights Agreement and the First Amendment to the Standstill Agreement being referred to therein and herein as the “Exempted Transactions”).

NOW THEREFORE, the parties have reached the following understandings:

1. Prior to the closing of the Merger (the “Closing”):

(a) Portfolio Logic will form a Delaware corporation (“Newco”) and will assign to Newco all of Portfolio’s Logic’s rights under the Merger Agreement pursuant to Section 9.7 thereof;

(b) The D3 Entities will collectively contribute to Newco shares of PSAI common stock having an aggregate value of not less than $18 million and not more than $24 million (collectively, the “D3 Contribution”), the precise amount of the D3 Contribution to be agreed upon by the parties; and

(c) in exchange for the D3 Contribution, Portfolio Logic will cause Newco to issue to each D3 Entity making a portion of the D3 Contribution a number of shares of common stock of Newco equal to the product of (i) the number of issued and outstanding shares of common stock of Newco and (ii) a fraction the numerator of which is the D3 Contribution of such D3 Entity and the denominator of which is the sum of (x) the aggregate D3 Contribution and (y) the amount contributed by Portfolio Logic to Newco in cash and shares of PSAI common stock (which shall include all the shares of PSAI common stock beneficially owned by Portfolio Logic immediately prior to the Closing and an amount of cash sufficient to result in the aggregate value of the shares of PSAI common stock and cash contributed by Portfolio Logic exceeding the aggregate value of the D3 Contribution so that Portfolio Logic will own a majority of the total shares of common stock of Newco outstanding immediately after the consummation of the transactions contemplated by this Section 1).

For purposes of the foregoing, all shares of PSAI common stock contributed by Portfolio Logic and the D3 Entities to Newco will be valued at the Merger Price.

2. Prior to the Closing, Portfolio Logic and the D3 Entities will enter into a shareholders agreement that will provide for:

(a) Mr. Nierenberg to be elected as a member of the board of directors of PSAI and Newco immediately following the Closing;

(b) each of Portfolio Logic and the D3 Entities to have customary registration rights with respect to their shares of Newco following the Closing; and

3. The parties will cooperate reasonably and in good faith with the aim of consummating the transactions contemplated by this MOU on a timeline consistent with the consummation of the Merger.

4. This MOU reflects the intentions of the parties, but is not intended to, and does not, constitute a legally binding contract. No party will be subject to any legally binding obligation with respect to the matters described herein until the execution and delivery by such parties of one or more definitive written agreements relating to such matters, which agreements the parties will negotiate in good faith.

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this MOU as of the date first above written.


		PORTFOLIO LOGIC LLC

		By:		Portfolio Logic Management LLC, its Manager

		By:		/s/ Jeffrey D. Zients

				Name: Jeffrey D. Zients
				Title: Manager

		DAVID NIERENBERG

		/s/ David Nierenberg

		In his individual capacity and as authorized signatory for the D3 Entities