8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 10, 2011

TOLLGRADE COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)

Pennsylvania	000-27312	25-1537134
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3120 Unionville Road, Suite 400
Cranberry Township, Pennsylvania	16066
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (724) 720-1400

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Introductory Note

     Effective May 10, 2011, Tollgrade Communications, Inc., a Pennsylvania corporation (the “Company”), completed its previously announced merger with Talon Merger Sub, Inc. (“Merger Sub”), a Pennsylvania corporation and a direct, wholly owned subsidiary of Talon Holdings, Inc., a Delaware corporation (“Parent”). Pursuant to the Agreement and Plan of Merger dated as of February 21, 2011, by and among the Company, Parent and Merger Sub (the “Merger Agreement”), Merger Sub was merged with and into the Company, with the Company surviving as a wholly owned subsidiary of Parent (the “Merger”). Parent is controlled by investment funds managed by Golden Gate Capital, a San Francisco-based private equity firm (“Golden Gate Capital”).

Item 2.01 Completion of Acquisition or Disposition of Assets.

     On May 10, 2011, the Merger was consummated and, in accordance with the Merger Agreement, each share of Company common stock issued and outstanding as of May 10, 2011 (other than shares (i) owned by Parent or Merger Sub as of May 10, 2011, (ii) held in the treasury of the Company, or (iii) held by a wholly-owned subsidiary of the Company) was automatically cancelled and converted into the right to receive $10.10 in cash (the “Merger Consideration”), without interest and less any applicable withholding taxes. Shares of Company common stock held by Parent or Merger Sub or held in the treasury of the Company as of May 10, 2011 were cancelled without conversion and without any payment or distribution being made with respect to such shares. Shares of Company common stock held by wholly-owned subsidiaries of the Company were converted into a number of shares of common stock of the surviving corporation (without any payment, distribution or consideration in respect thereof) that was proportionately equal to the percentage of common stock that each such subsidiary owned in the Company as of May 10, 2011.

     Upon the closing of the Merger, the Company became a wholly-owned subsidiary of Parent, and the Company’s common stock, which traded under the symbol “TLGD,” is being delisted from the NASDAQ Global Select Market (“NASDAQ”).

     The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which has been filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2011 and is incorporated herein by reference.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

     In connection with the Merger, the Company notified NASDAQ on May 10, 2011 of the consummation of the Merger pursuant to which each share of Company common stock (except as otherwise provided in the Merger Agreement and described above under Item 2.01) was cancelled and converted into the right to receive $10.10 in cash, without interest and less any

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applicable withholding taxes. At the Company’s request, NASDAQ filed with the SEC an application on Form 25 to deregister the common shares under Section 12(b) of the Securities Exchange Act of 1934 and report that the Company’s common shares are no longer listed on NASDAQ.

Item 3.03 Material Modification to Rights of Security Holders.

     The information set forth in Items 2.01, 3.01 and 5.03 is incorporated herein by reference.

Item 5.01 Changes in Control of Registrant.

     Pursuant to the terms of the Merger Agreement, the Merger was completed on May 10, 2011 upon the filing of Articles of Merger with the Department of State of the Commonwealth of Pennsylvania, at which time Merger Sub merged with and into the Company. As a result of the Merger, the Company became a wholly-owned subsidiary of Parent. The disclosure under Item 2.01 is incorporated herein by reference.

     The aggregate consideration paid in connection with the Merger was approximately $137.2 million, which consideration was funded by a combination of equity financing from investment funds affiliated with Golden Gate Capital, borrowings under a new senior secured term loan facility and the Company’s available cash and cash equivalents.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     In connection with the Merger, each of the following members of the Company’s Board of Directors resigned from the Board of Directors as of the effective time of the Merger: Scott C. Chandler, Richard H. Heibel, Charles E. Hoffman, Robert W. Kampmeinert, Edward B. Meyercord, III and Jeffrey M. Solomon. These resignations were not a result of any disagreements between the Company and the current directors on any matter relating to the Company’s operations, policies or practices.

     Following such resignations, Ken Diekroeger, John Knoll and Rishi Chandna were elected to the Board of Directors. Edward H. Kennedy remains a director of the Company.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

     At the effective time of the Merger and pursuant to the Merger Agreement, the Company’s articles of incorporation were amended and restated in their entirety. A copy of the second amended and restated articles of incorporation of the Company is attached hereto as Exhibit 3.1 and is incorporated herein by reference.

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Item 8.01 Other Events.

     On May 10, 2011, the Company issued a press release in connection with the consummation of the merger. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

2.1	Agreement and Plan of Merger, dated as of February 21, 2011, by and among Tollgrade Communications, Inc., Talon Holdings, Inc. and Talon Merger Sub, Inc. (filed as Exhibit 2.1 to the Form 8-K filed with the SEC on February 25, 2011 and incorporated herein by reference).
3.1	Second Amended and Restated Articles of Incorporation of the Company (filed herewith).
99.1	Press Release issued by the Company, dated May 10, 2011 (filed herewith).

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TOLLGRADE COMMUNICATIONS, INC.
By:	/s/Jennifer M. Reinke
	Name:	Jennifer M. Reinke
	Title:	General Counsel and Secretary

Date: May 13, 2011

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INDEX OF EXHIBITS

Exhibit No.		Description
	2.1	Agreement and Plan of Merger, dated as of February 21, 2011, by and among Tollgrade Communications, Inc., Talon Holdings, Inc. and Talon Merger Sub, Inc. (filed as Exhibit 2.1 to the Form 8-K filed with the SEC on February 25, 2011 and incorporated herein by reference)
	3.1	Second Amended and Restated Articles of Incorporation of the Company (filed herewith)
	99.1	Press Release issued by the Company, dated May 10, 2011 (filed herewith)

EX-3.1

EXHIBIT 3.1

SECOND AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

TOLLGRADE COMMUNICATIONS, INC.

1. Name. The name of the Corporation is Tollgrade Communications, Inc.

2. Address of Registered Office. The address of the Corporation’s registered office in the Commonwealth of Pennsylvania is 3120 Unionville Road, Suite 400, Cranberry Township, Butler County, PA 16066.

3. Business Corporation Law of 1988. The Corporation is incorporated under the provisions of the Business Corporation Law of 1988.

4. Capital Stock.

     (a) Generally. The authorized capital stock of the Corporation shall be: 50,000,000 shares of Common Stock, par value of $.20 per share, and 10,000,000 shares of Preferred Stock, par value of $1.00 per share.

     (b) No Cumulative Voting. Shareholders shall not be entitled to cumulative voting rights in the election of directors.

5. Uncertificated Shares. Every class and series of shares, or any part thereof, may be uncertificated. Any share that is represented by a certificate on the date hereof shall only be entitled to be uncertificated after it is first surrendered to the corporation.

6. Personal Liability of Directors and Officers.

     (a) Limitation on Liability of Directors. To the fullest extent that the laws of the Commonwealth of Pennsylvania, as now in effect or as hereafter amended, permit elimination or limitation of the liability of directors, no director of the Corporation shall be personally liable for monetary damages as such for any action taken, or any failure to take any action, as a director.

     (b) Officers: Standard of Care and Personal Liability. An officer of the Corporation shall perform his duties as an officer in good faith, and in a manner he reasonably believes to be in the best interests of the Corporation, so long as his performance does not constitute self-dealing, willful misconduct or recklessness. A person who so performs his duties shall not be liable by reason of having been an officer of the Corporation. The provisions of this paragraph (b) shall not apply to (i) the responsibility or liability of an officer pursuant to any criminal statute or (ii) the liability of an officer for the payment of taxes pursuant to Federal, State or local law.

     (c) Nature and Extent of Rights. The provisions of this Article shall be deemed to be a contract with each director and officer of the Corporation who serves as such at any time while this Article is in effect, and each director and officer shall be deemed to be so serving in reliance on the provisions of this Article. Any amendment or repeal of this Article or adoption of any bylaw or provision of the Second Amended and Restated Articles of Incorporation of the Corporation which has the effect of increasing director or officer liability shall operate prospectively only and shall not have any effect with respect to any action taken, or any failure to act, by a director or officer prior thereto.

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EX-99.1

Exhibit 99.1

Contact: Greg Nulty, Corporate Communications / Office: 724 720 1465

Tollgrade Communications Acquired by Golden Gate Capital

Cranberry Twp., Pennsylvania — May 10, 2011 — Tollgrade Communications, Inc. (Nasdaq: TLGD) today announced the closing of its previously announced sale to Golden Gate Capital, a global private equity firm. The transaction was completed in accordance with the terms of a merger agreement, which was announced in February 2011 and approved by Tollgrade shareholders at a special meeting held last week. In connection with the transaction, Tollgrade’s shares will cease to be publicly traded.

Tollgrade is a leading provider of network service assurance solutions for telecommunications operators in the United States and Europe and is a market leader in the broadband access market, with approximately 112 employees around the globe. Tollgrade’s smart grid solutions for the utilities industry enable electric utilities to provide real-time grid intelligence and immediate fault detection, which helps to minimize the impact of outages and optimize utilization of assets.

“We are very pleased that we successfully finalized this transaction with Golden Gate Capital. It is an exciting day and an important milestone for Tollgrade, and we are looking forward to further developing our market presence and serving our customers even better by enhancing our product portfolio,” said Ed Kennedy, CEO and president of Tollgrade Communications. “Backed by the strength of Golden Gate Capital, Tollgrade will continue to drive its leading technological position in three key sectors: managed services, communications and smart grid.”

Golden Gate Capital is a San Francisco-based private equity firm with more than $9 billion of capital under management. The multi-sector fund has equity investments in companies across a broad range of industries, including a rich background and growing presence in the telecommunications and smart grid space.

“We are excited to partner with Tollgrade’s existing management team to pursue a variety of growth opportunities from such a stable and proven base of business,” said John Knoll, managing director of Golden Gate Capital. “With the support of Golden Gate’s resources and deep industry expertise, Tollgrade can continue to build upon its leading technologies and products to better serve its customers. We are delighted to have Tollgrade join our portfolio.”

About Tollgrade

Tollgrade Communications, Inc. (NASDAQ:TLGD) is a leading provider of network assurance solutions for the telecommunications and utilities industries. Our real-time Smart Grid Monitoring solutions allow utility customers to continuously detect key circuit parameters, and communicate mission critical data wirelessly to a central location to provide Continuous Grid Intelligence™. Tollgrade telecommunication products and solutions enable communication service providers to efficiently manage their access networks in an age of increased competition, continually evolving technology, and ongoing pressure to reduce costs. Installed in more than 70 of the world’s telecommunications operators, Tollgrade systems test over 250 million subscriber lines worldwide. For more information, visit Tollgrade online at www.tollgrade.com.

TOLLGRADE COMMUNICATIONS, INC. 3120 Unionville Road, Suite 400 Cranberry Township, PA 16066 www.tollgrade.com

About Golden Gate Capital

Golden Gate Capital is a San Francisco-based private investment firm with approximately $9 billion of capital under its management. The firm’s charter is to partner with world-class management teams to make equity investments in situations where there is a demonstrable opportunity to significantly enhance a company’s value. The principals of Golden Gate have a long and successful history of investing with management partners across a wide range of industries and transaction types, including going-privates, corporate divestitures, leveraged buyouts and recapitalizations. For additional information, visit www.goldengatecap.com.