sec document
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. )(1)
Devcon International, Inc.
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(Name of issuer)
COMMON STOCK, $0.10 PAR VALUE PER SHARE
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(Title of class of securities)
251588 10 9
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(CUSIP number)
HARVEY J. KESNER, ESQ.
OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
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(Name, address and telephone number of person
authorized to receive notices and communications)
March 21, 2005
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(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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
NOTE. The Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 9 Pages)
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(1) 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 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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CUSIP No. 251588 10 9 13D Page 2 of 9 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
MICHAEL H. BRAUSER
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0 shares
OWNED BY -----------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 442,353 shares (1) (2)
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9 SOLE DISPOSITIVE POWER
0 shares
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10 SHARED DISPOSITIVE POWER
442,353 shares (1) (2)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
442,353 shares (1) (2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.2%
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14 TYPE OF REPORTING PERSON*
IN
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(1) Includes 187,222 shares of common stock of the Issuer issuable upon the
exercise of warrants. All shares and warrants held by Michael and Betsy
Brauser, tenants by entireties.
(2) Excludes (1) additional shares of common stock and warrants held by Coconut
Palm Capital Investors I, Ltd. not distributed to the Reporting Person. The
Reporting Person has no dispositive or voting control over the shares not
distributed by Coconut Palm Investors I, Ltd. and (2) 192 shares to be used
to cover pending transactions.
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CUSIP No. 251588 10 9 13D Page 3 of 9 Pages
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The following constitutes the Schedule 13D filed by the undersigned
(the "Schedule 13D").
Item 1. SECURITY AND ISSUER.
This statement relates to shares of the Common Stock, par value $0.10
(the "Shares"), of Devcon International, Inc. (the "Issuer"). The address of the
principal executive offices of the Issuer is 1350 East Newport Center Drive,
Suite 201, Deerfield Beach, FL 33442.
Item 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed by Michael H. Brauser (the "Reporting
Person"). The Reporting Person's principal business/occupation is private
investor. The principal business address of The Reporting Person is 595 S.
Federal Highway, Suite 600, Boca Raton, FL 33432. The Reporting Person is a
citizen of the United States.
During the last five years, the Reporting Person has not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). In addition, during the last five years, the Reporting Person has
not been a party to a civil proceeding of any judicial or administrative body of
competent jurisdiction as a result of which it or he 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.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As of March 7, 2006, the Reporting Person beneficially owned 185,683
shares of Common Stock (excluding 192 shares to be used to cover pending
transactions) and 256,670 warrants to purchase shares of Common Stock consisting
of warrants to purchase shares at exercise prices as follows: 93,611 $10.00
warrants which will expire July 30, 2007; 81,529 $11.00 warrants which will
expire July 30, 2008; and 81,530 $15.00 warrants which will expire July 30,
2009. The Reporting Person acquired 187,222 Shares and warrants to purchase
187,222 Shares on March 21, 2005 by liquidation from a partnership. The total
purchase price for the purchase by the Reporting Person of the partnership
interest was $1,685,000. The cost of the additional Shares acquired by the
Reporting Person is $313,350 and were acquired with personal funds.
DIG Ventures, LLC, a Florida limited liability company, acquired
138,896 Shares and warrants to purchase 138,896 Shares on March 21, 2005 by
liquidation from a partnership. The Reporting Person is deemed to be the
beneficial owner of the DIG Ventures, LLC Shares and warrants by virtue of his
position as Manager and was also the indirect beneficial owner of these Shares
and warrants. As of March 21, 2005, all but 69,448 warrants of DIG Ventures, LLC
Shares and warrants were distributed to its members and were no longer deemed
beneficially owned by the Reporting Person. The total purchase price for the
purchase by DIG Ventures, LLC of the partnership interest was $1,250,064.
Item 4. PURPOSE OF TRANSACTION.
The Reporting Person is holding the Shares for investment purposes
based on the Reporting Person's belief that the Shares are undervalued and
represent an attractive investment opportunity. Depending upon overall market
conditions, other investment opportunities available to the Reporting Person,
and the availability of Shares at prices that would make the purchase of
additional Shares desirable, the Reporting Person may endeavor to increase his
position 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 Person may deem advisable.
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CUSIP No. 251588 10 9 13D Page 4 of 9 Pages
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On March 6, 2006, the Reporting Person sent a letter to the Board of
Directors of the Issuer expressing his willingness to offer to acquire all the
outstanding shares of the Issuer, in a negotiated transaction, either directly
or through an appropriate acquisition entity formed for such purpose, by merger
or otherwise, for $11.00 per share in cash. In addition, the Reporting Person
also would seek to provide the cash to pay off outstanding indebtedness, and
would cash-out outstanding in-the-money options and warrants (based on a
purchase price of $11.00 per share of common stock), with all out-of-the-money
options and warrants cancelled. The Reporting Person believes that his all-cash
offer will provide the Issuer's stockholders much needed liquidity and an
immediate opportunity to maximize the value of their shares by allowing them to
sell their positions at a premium without brokerage fees or commissions.
If the Issuer does not accept the negotiated offer, it is the
Reporting Person's intention to offer to help the Issuer strategically if such
opportunities present themselves and the Reporting Person may in the future take
such actions with respect to his investment in the Issuer as he deems
appropriate including, without limitation, seeking Board representation, making
proposals to the Issuer concerning changes to the capitalization, ownership
structure, or operations of the Issuer, purchasing additional Shares, selling
some or all of his Shares, engaging in short selling of or any hedging or
similar transaction with respect to the Shares, or changing his 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 5,826,660 Shares outstanding, which is the total
number of Shares outstanding as of November 15, 2005, as reported in the
Issuer's report for the quarter ended September 30, 2005 as filed with the
Securities and Exchange Commission on November 21, 2005.
As of March 7, 2006, the Reporting Person beneficially owned 442,353
Shares (excluding 192 Shares to be used to cover a pending transaction),
constituting approximately 7.2% of the Shares outstanding. The beneficial
ownership also excludes shares of common stock and warrants held by Coconut Palm
Capital Investors I, Ltd. but have not been distributed to the Reporting Person
and over which the Reporting Person has no dispositive or voting control.
(b) The Reporting Person shares the power to vote and dispose or to
direct the vote and disposition of 185,683 Shares, or 3.2% of the Shares
outstanding. In additional, the Reporting Person shares the power to vote and
dispose of the 256,670 Shares issuable upon the exercise of warrants, or 4.2% of
the Shares outstanding.
(c) Schedule A attached hereto lists all the transactions by the
Reporting Person in the Shares within 60 days from the date of this Statement.
(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.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Not applicable.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Letter to the Board of Directors of Devcon International, Corp.
dated March 6, 2006.
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CUSIP No. 251588 10 9 13D Page 5 of 9 Pages
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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: March 7, 2006
/s/ Michael H. Brauser
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MICHAEL H. BRAUSER
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CUSIP No. 251588 10 9 13D Page 6 of 9 Pages
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SCHEDULE A
Transactions within the Past 60 Days
(As an initial report of Beneficial Ownership the information provided
reflects all transactions since the due date of the initial report of the
Reporting Person.)
MICHAEL H. BRAUSER
Shares of Common Stock
Acquired/Disposed Price Per Share($) Date of Purchase
----------------- ------------------ ----------------
10,000 $9.84 3/2/06
500 $10.86 12/13/05
1,000 $10.92 12/5/05
2,800 $10.90 12/2/05
8,000 $9.76 10/12/05
10,000 (2) $9.00 3/21/05
AFFILIATES OF REPORTING PERSON
Shares of Common Stock
Acquired/Disposed Price Per Share($) Date of Purchase
----------------- ------------------ ----------------
187,222 (1) $9.00 3/21/05
(33,645)(3) $9.00 3/21/05
Warrants to -- 3/21/05
Purchase
187,222 (1)
138,896 (1) $9.00 3/21/05
(138,896)(4) $9.00 3/21/05
Warrants to -- 3/21/05
Purchase
138,896 (1)
Warrants to Purchase -- 3/21/05
(69,448) (4)
(1) Represents distribution from Coconut Palm Capital Investors I,
Ltd. ("Coconut Palm") of the original investment of (i) Michael
and Betsy Brauser, as tenants in the entirety, of $1,685,000 in
May 2004 and (ii) DIG Ventures, Ltd. of $1,250,064 in May 2004.
Coconut Palm purchased Class A Units of the Issuer in a private
placement and distributed Shares and warrants to the Reporting
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CUSIP No. 251588 10 9 13D Page 7 of 9 Pages
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Person as of March 21, 2005. The Reporting Person has no
dispositive or voting control over shares not distributed by
Coconut Palm Investors I, Ltd.
(2) Transferred from an affiliate's account.
(3) Shares used to cover pending transactions.
(4) Transferred to an affiliate's account who was an investor in
Coconut Palm.
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CUSIP No. 251588 10 9 13D Page 8 of 9 Pages
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EXHIBIT INDEX
Exhibit Page
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1. Letter to the Board of Directors of Devcon International,
Corp. dated March 3, 2006. 9
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CUSIP No. 251588 10 9 13D Page 9 of 9 Pages
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EXHIBIT 1
March 3, 2006
The Board of Directors
Devcon International Corp.
1350 East Newport Center Drive, Suite 201
Deerfield Beach, Florida 33442
Gentlemen:
I am the beneficial owner of 185,877 shares of common stock and 256,670
warrants of Devcon International Corp. (the "Company"). I have been a long-term
investor in the Company and am fully familiar with its historic business
operations and the recent announced acquisitions. I believe that despite the
recent short-term increase in the Company's common stock price, that the public
market for the Company does not fully appreciate the Company's business and
prospects, and the Company's stockholders deserve the opportunity to be provided
with value at a premium to prices reflected in the current market. I hereby set
forth my willingness to offer to acquire the Company in a negotiated
transaction, either directly or through an appropriate acquisition entity formed
for such purpose, by merger or otherwise, for $11.00 per share, in cash. In
addition, I would also provide the cash to pay off outstanding indebtedness and
cash-out outstanding in-the-money options and warrants at this price. I would
expect all out-of-the-money options and warrants to be cancelled. I believe that
this all-cash offer will provide the Company's stockholders much needed
liquidity and an immediate opportunity to maximize the value of their shares by
allowing them to sell their positions at a premium without brokerage fees or
commissions. I recognize that the Company is contemplating a closing of a
private placement note offering next week the proceeds of which would be
utilized to purchase Guardian International and to repay an $8 million bridge
loan. As part of the proposed transaction, I am willing to arrange a bridge
facility on more favorable terms and would be prepared to initiate efforts to
secure the financing.
I propose that this transaction be accomplished through a definitive tender
offer/merger agreement. My proposal is conditioned upon satisfactory completion
of limited due diligence, obtaining all necessary financing commitments,
consents and approvals, waiver of any anti-takeover provisions and statutes,
other customary conditions, including no material adverse change in the
Company's business, and the execution of a definitive merger agreement. I am
prepared to enter into an appropriate confidentiality agreement and commence my
due diligence immediately. If as a result of my due diligence I find evidence of
additional value inherent in the Company, I would be willing to upwardly adjust
the offer price to reflect such additional value. I invite you to share with me
any documentation in your possession that you believe reflects additional value
in the shares that you believe is not already known to me.
I believe the current management team has served the Company well during
the past few years and I anticipate that the current management team would be an
integral part of the Company going forward. To that end, I would be willing to
discuss appropriate employment agreements with current members of management as
part of our overall negotiations.
I stand ready to meet with the Board of Directors and its representatives
as soon as possible in order to proceed. Please contact me at 561-544-2451 to
discuss any questions the Board might have.
Very truly yours,
/s/ Michael H. Brauser
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Michael H. Brauser