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UNITED
STATES
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OMB
APPROVAL
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SECURITIES
AND EXCHANGE
COMMISSION
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OMB
Number:
3235-0145
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Washington,
D.C. 20549
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Expires:
February 28, 2009
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SCHEDULE
13D
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Estimated
average burden hours per response. .
14.5
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CUSIP
No. 449520303
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1.
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Names
of Reporting Persons.
Discovery
Group I, LLC
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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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o
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(b)
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o
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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)
AF
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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) o
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6.
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Citizenship
or Place of Organization
Delaware
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Number
of
Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
None.
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8.
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Shared
Voting Power
1,295,618
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9.
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Sole
Dispositive Power
None.
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10.
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Shared
Dispositive Power
1,295,618
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
1,295,618
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) o
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13.
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Percent
of Class Represented by Amount in Row (11)
5.3%
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14.
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Type
of Reporting Person (See Instructions)
OO
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CUSIP
No. 449520303
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1.
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Names
of Reporting Persons.
Daniel
J. Donoghue
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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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o
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(b)
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o
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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)
AF
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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) o
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6.
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Citizenship
or Place of Organization
United
States of America
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Number
of
Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
None.
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8.
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Shared
Voting Power
1,295,618
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9.
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Sole
Dispositive Power
None.
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10.
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Shared
Dispositive Power
1,295,618
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
1,295,618
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) o
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13.
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Percent
of Class Represented by Amount in Row (11)
5.3%
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14.
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Type
of Reporting Person (See Instructions)
IN
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CUSIP
No. 449520303
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1.
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Names
of Reporting Persons.
Michael
R. Murphy
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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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o
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(b)
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o
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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)
AF
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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) o
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6.
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Citizenship
or Place of Organization
United
States of America
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Number
of
Shares
Beneficially
Owned
by
Each
Reporting
Person
With
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7.
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Sole
Voting Power
None.
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8.
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Shared
Voting Power
1,295,618
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9.
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Sole
Dispositive Power
None.
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10.
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Shared
Dispositive Power
1,295,618
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
1,295,618
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) o
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13.
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Percent
of Class Represented by Amount in Row (11)
5.3%
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14.
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Type
of Reporting Person (See Instructions)
IN
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Item
1.
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Security
and Issuer
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This
statement relates to the Common Stock, par value $0.001 per share (the
“Common Stock”),
of I-Flow Corporation., a Delaware corporation (the “Company”), which has its
principal executive offices at 20202 Windrow Drive, Lake Forest,
California 92630.
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Item
2.
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Identity
and Background
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| This statement is being jointly filed by the following persons (the “Reporting Persons”): | |
| Discovery Group I, LLC (“Discovery Group”) is a Delaware limited liability company primarily engaged in the business of investing in securities. | |
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Daniel
J. Donoghue is a Managing Member of Discovery Group and of various related
entities, which is his principal occupation.
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Michael
R. Murphy is a Managing Member of Discovery Group and of various related
entities, which is his principal occupation.
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Both
Mr. Donoghue and Mr. Murphy are United States
citizens.
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The
business address of each of the Reporting Persons is 191 North Wacker
Drive, Suite 1685, Chicago, Illinois 60606.
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During
the past five years, none of the Reporting Persons have been (i) convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding 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.
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Item
3.
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Source
and Amount of Funds or Other Consideration
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The
total purchase price for the 1,295,618 shares of Common Stock beneficially
owned by Discovery Group and Messrs. Donoghue and Murphy as of July 24,
2009 was approximately $7,266,923. The source of such funds was
the assets of two private investment partnerships (collectively, the
“Partnerships”)
over which Discovery Group exercises discretionary investment management
authority, and proceeds of margin loans under margin loan facilities
maintained in the ordinary course of business by the Partnerships with a
broker on customary terms and conditions. The Partnerships are
the legal owner of all of the Common Stock beneficially owned by Discovery
Group and Messrs. Donoghue and Murphy.
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Item
4.
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Purpose
of Transaction
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The
Reporting Persons acquired beneficial ownership of the shares of Common
Stock reported herein as part of their investment activities on behalf of
the Partnerships. The Reporting Persons acquired the shares of
Common Stock reported herein because they believe that the trading prices
of the Common Stock do not adequately reflect the potential value of the
Company's underlying business and assets.
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The
Reporting Persons intend to review and evaluate their investment in the
Common Stock on an ongoing basis and may, depending upon their evaluation
of the business and prospects of the Company, or such other considerations
as they may deem relevant, determine to increase, decrease, or dispose of
their holdings of Common Stock. As a part of such review and
evaluation, the Reporting Persons may hold discussions with the Company's
management and directors, other shareholders and other interested
parties.
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Except
as otherwise described in this Item 4, the Reporting Persons do not have
present plans or proposals that relate to or would result in any of the
following (although the Reporting Persons reserve the right to develop
such plans or proposals or any other plans relating to the Company and to
take action with respect thereto): (i) the acquisition by any
person of additional securities of the Company, or the disposition of
securities of the Company; (ii) an extraordinary corporate transaction,
such as a merger, reorganization, or liquidation, involving the Company or
any of its subsidiaries; (iii) a sale or transfer of a material amount of
assets of the Company or any of its subsidiaries; (iv) any change in the
present board of directors or management of the Company, including any
plans or proposals to change the number or term of directors or to fill
any existing vacancies on the board; (v) any material change in the
present capitalization or dividend policy of the Company; (vi) any other
material change in the Company’s business or corporate structure; (vii)
changes in the Company's certificate of incorporation, bylaws, or
instruments corresponding thereto or other actions that may impede the
acquisition of control of the Company by any person; (viii) causing a
class of securities of the Company to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association; (ix) a class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section 12(g)(4) of
the Securities Exchange Act of 1934, as amended; or (x) any action similar
to any of those enumerated above.
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Item
5.
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Interest
in Securities of the Issuer
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| The information concerning percentages of ownership set forth below is based on 24,444,345 shares of Common Stock reported outstanding as of April 30, 2009 in the Company’s most recent Quarterly Report on Form 10-Q, for the period ended March 31, 2009. | |
| Discovery Group beneficially owns 1,295,618 shares of Common Stock as of July 24, 2009, which represents 5.3% of the outstanding Common Stock. | |
| Mr. Donoghue beneficially owns 1,295,618 shares of Common Stock as of July 24, 2009, which represents 5.3% of the outstanding Common Stock. | |
| Mr. Murphy beneficially owns 1,295,618 shares of Common Stock as of July 24, 2009, which represents 5.3% of the outstanding Common Stock. | |
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Discovery
Group is the sole general partner of one of the Partnerships and has sole
discretionary investment authority with respect to the other Partnership’s
investment in the Common Stock. Messrs. Donoghue and Murphy are
the sole managing members of Discovery Group. As a consequence,
Discovery Group and Messrs. Donoghue and Murphy may be deemed to share
beneficial ownership of all of the shares of Common Stock owned by both of
the Partnerships.
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The
transactions in Common Stock effected by the Reporting Persons during the
past 60 days are set out in Exhibit 1
hereto.
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No
person other than the Partnerships is known to any Reporting Person to
have the right to receive or the power to direct the receipt of dividends
from, or the proceeds from the sale of, any of the shares of Common Stock
reported herein.
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Item
6.
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Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer
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There
are no contracts, arrangements, understandings or relationships (legal or
otherwise) between or among any of the Reporting Persons and any other
person with respect to any securities of the Company other than the
governing documents of Discovery Group and the Partnerships, the margin
loan facilities referred to under Item 3 above, the Joint Filing Agreement
of the Reporting Persons with respect to this Schedule 13D included as
Exhibit 2 to this Schedule 13D, and
the Powers of Attorney granted by Messrs Donoghue and Murphy with respect
to reports under Section 13 of the Securities Exchange Act of 1934, as
amended, which Powers of Attorney are included as Exhibit 3 and Exhibit 4, respectively, to this Schedule
13D.
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Item
7.
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Material
to Be Filed as Exhibits
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Exhibit
1:
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List
of transactions by Reporting Persons in the Company’s Common Stock during
the 60-day period preceding this filing.
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Exhibit
2:
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Joint
Filing Agreement dated as of July 27, 2009, by and among Discovery Group;
Daniel J. Donoghue; and Michael R. Murphy.
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Exhibit
3:
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Power
of Attorney of Daniel J. Donoghue, dated as of April 28,
2008.
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Exhibit
4:
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Power
of Attorney of Michael R. Murphy, dated as of April 28,
2008.
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July
27, 2009
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Date
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DISCOVERY
GROUP I, LLC
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By: Michael
R. Murphy*
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Signature
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Michael
R. Murphy, Managing Member
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Name/Title
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Daniel
J. Donoghue*
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Signature
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Daniel
J. Donoghue
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Name/Title
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Michael
R. Murphy*
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Signature
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Michael
R. Murphy
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Name/Title
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*By:
/s/ Mark Buckley
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Mark
Buckley
Attorney-in-Fact
for Daniel J. Donoghue
Attorney-in-Fact
for Michael R. Murphy
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Exhibit
1
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List
of transactions by Reporting Persons in the Company’s Common Stock during
the 60-day period preceding this filing.
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Exhibit
2
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Joint
Filing Agreement dated as of July 27, 2009, by and among Discovery Group;
Daniel J. Donoghue; and Michael R. Murphy.
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Exhibit
3
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Power
of Attorney of Daniel J. Donoghue, dated as of April 28,
2008.
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Exhibit
4
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Power
of Attorney of Michael R. Murphy, dated as of April 28,
2008.
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