Form 8-K

KINETIC CONCEPTS, INC.

(Registrant)

Date: July 13, 2011

/s/ Martin J. Landon

Martin J. Landon

Executive Vice President and Chief Financial Officer

0001193125-11-187671.txt : 20110713 0001193125-11-187671.hdr.sgml : 20110713 20110713171845 ACCESSION NUMBER: 0001193125-11-187671 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20110713 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110713 DATE AS OF CHANGE: 20110713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KINETIC CONCEPTS INC CENTRAL INDEX KEY: 0000831967 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FURNITURE & FIXTURES [2590] IRS NUMBER: 741891727 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09913 FILM NUMBER: 11966325 BUSINESS ADDRESS: STREET 1: 8023 VANTAGE DR CITY: SAN ANTONIO STATE: TX ZIP: 78230 BUSINESS PHONE: 210.524.9000 MAIL ADDRESS: STREET 1: P0 B0X 659508 CITY: SAN ANTONIO STATE: TX ZIP: 78265-9508 FORMER COMPANY: FORMER CONFORMED NAME: KINETIC CONCEPTS INC /TX/ DATE OF NAME CHANGE: 19920703 8-K 1 d8k.htm FORM 8-K Form 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): July 13, 2011

KINETIC CONCEPTS, INC.

(Exact name of registrant as specified in its charter)


Texas	001-09913	74-1891727
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

8023 Vantage Drive San Antonio, Texas	78230	(210) 524-9000
(Address of principal executive offices)	(Zip Code)	(Registrant’s telephone number, including area code)

	N/A
(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:

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

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

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

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

Item 8.01 Other Events.

On July 13, 2011, Catherine M. Burzik, President and Chief Executive Officer of Kinetic Concepts, Inc. (the “Company”) led a call with employees of the Company discussing the proposed acquisition of the Company by a consortium comprised of investment funds advised by Apax Partners, and controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board (the “Merger”). In connection with this call, the Company distributed the following materials, each of which is attached hereto and is incorporated herein by reference:

•

Global Leadership Team Call Talking Points, dated July 13, 2011

•

Global Leadership Team Call Frequently Asked Questions, dated July 13, 2011

On July 13, 2011, the Company also distributed an email to its employees discussing the Merger, attached hereto and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

The following exhibits are filed with this Form 8-K:


Exhibit Number		Description

Exhibit 99.1		Global Leadership Team Call Talking Points, dated July 13, 2011

Exhibit 99.2		Global Leadership Team Call Frequently Asked Questions, dated July 13, 2011

Exhibit 99.3		Email Announcement Regarding Merger, dated July 13, 2011

Additional Information and Where to Find It

This filing may be deemed to be solicitation material in respect of the proposed acquisition of the Company by investment funds advised by Apax Partners, and controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board. In connection with the proposed acquisition, the Company plans to file a proxy statement with the SEC. INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The definitive proxy statement will be mailed to shareholders of the Company. Investors and security holders may obtain a free copy of the proxy statement when it becomes available, and other documents filed by the Company with the SEC, at the SEC’s web site at http://www.sec.gov. Free copies of the proxy statement, when it becomes available, and the Company’s other filings with the SEC may also be obtained from the Company by directing a request to Kinetic Concepts, Inc., Attention: Investor Relations, 8023 Vantage Drive, San Antonio, TX 78230, or by calling 210-255-6157.

Participants in Solicitation

The Company and its directors, executive officers and other members of its management and employees may be deemed to be soliciting proxies from the Company’s shareholders in favor of the proposed acquisition. Information regarding the Company’s directors and executive officers is available in its 2010 Annual Report on Form 10-K filed with the SEC on March 1,

2011 and definitive proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on April 15, 2011. Shareholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the proposed acquisition, which may be different than those of the Company’s shareholders generally, by reading the proxy statement and other relevant documents filed with the SEC when they become available.

Cautionary Statement Regarding Forward-Looking Statements

This filing contains forward-looking statements, which may be identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “should,” “seeks,” “future,” “continue,” or the negative of such terms, or other comparable terminology. Forward-looking statements are subject to risks, uncertainties, assumptions and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors that could cause actual results to differ materially include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; (2) the outcome of any legal proceedings that may be instituted against the Company and others following announcement of the Merger Agreement; (3) the inability to complete the Merger due to the failure to satisfy the conditions to the Merger, including obtaining the approval of at least two-thirds of the Company’s shareholders, the expiration of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of other required regulatory approvals; (4) risks that the proposed transaction disrupts current plans and operations and potential difficulties in employee retention as a result of the Merger; (5) the ability to recognize the benefits of the Merger; (6) legislative, regulatory and economic developments; and (7) other factors described in the Company’s filings with the SEC. Many of the factors that will determine the outcome of the subject matter of this filing are beyond the Company’s and the consortium’s ability to control or predict. The Company can give no assurance that the conditions to the Merger will be satisfied. Except as required by law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. The Company is not responsible for updating the information contained in this filing beyond the published date, or for changes made to this filing by wire services or Internet service providers.

* * * * *

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.

EXHIBIT INDEX


Exhibit Number		Description

Exhibit 99.1		Global Leadership Team Call Talking Points, dated July 13, 2011

Exhibit 99.2		Global Leadership Team Call Frequently Asked Questions, dated July 13, 2011

Exhibit 99.3		Email Announcement Regarding Merger, dated July 13, 2011

EX-99.1 2 dex991.htm GLOBAL LEADERSHIP TEAM CALL TALKING POINTS Global Leadership Team Call Talking Points

Exhibit 99.1

Talking Points

As of 7/13 4 am

GLT discussions with employees (General)

•

We’re a financially strong company made up of great people, differentiated global assets and tremendous opportunities for growth. That makes us naturally attractive to investors.

•

A consortium of investors (Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board) approached our board of directors with a formal offer. After a thorough evaluation, the board concluded that this transaction would deliver exceptional value to our shareholders.

•

If finalized, this agreement would bring together KCI’s clinical expertise, commercial capabilities and global reach with a seasoned group of investors that has expertise in global markets and a proven track record in healthcare sector investments.

•

This offer recognizes the value of our products and services, our consistently strong balance sheet, the hard work of our people, and the ingenuity and innovation that we’ve brought to customers and patients. This is also an acknowledgment of our potential to reach more patients around the world.

•

While our capital structure may change, how we think about the business — our strategy, delivering solutions to our customers – remains our top focus. Patients will always be our top priority. That doesn’t change and we should continue to execute on our strategy.

•

We’ve been both public and private before and that has enabled us to deliver innovative products and therapies and great value for our customers. While public, we acquired LifeCell. When we were last a privately held company we accelerated V.A.C. Therapy from humble beginnings to one of the most successful medical devices ever created.

•

Although the agreement has been announced, this is just the first step in a process and the transaction has not yet closed. There is now a customary 40-day ‘go-shop period’ in which other interested parties could make a superior offer and our board and shareholders would be obligated to consider that offer, as well. If there is no superior offer, and shareholders approve the merger, the transaction would close by the fourth quarter of this year.

•

The potential for this transaction to be completed does not prevent us from executing on our strategy. We should stay focused on meeting our business objectives.

•

We understand that during this transition there may be feelings of uncertainty and questions will come up. In these types of transactions, everything does not happen at one time – they come incrementally. We promise to share as much information as we can throughout this process.

Business Unit leadership discussions with sales representatives

•

Because you are such a large and important group, and so spread out around the company, we want to make sure you understand what is going on, what it means to you, and why you should keep focus on taking care of your customers.

•

This is an opportunity to take a great company and make it even greater by building on our record of ingenuity and innovation.

•

While our capital structure may change, how we think about the business – our strategy, delivering solutions to our customers – remains our top focus. Patients will always be our top priority. That doesn’t change and we should continue to execute on our strategy.

•

This is the first step in a process. There is now a customary 40-day ‘go-shop period’ in which other interested parties could make a superior offer and our board and shareholders would be obligated to consider that offer, as well. If there is no superior offer, and shareholders approve the merger, the transaction would close by the fourth quarter of this year.

•

The potential for this transaction to be completed does not prevent us from executing on our strategy. We should stay focused on meeting our business objectives.

•

We know that you will get lots of questions because you are on the frontline talking to our customers. We want to get feedback on what you hear so we can address customer issues as quickly and clearly as possible.

•

Stay focused on your customers and we will stay focused on you. We will make it priority-one to address your questions.

Sales representatives’ response to frontline customers’ inquiries

•

Our board of directors was approached by a consortium of investors with a formal offer and carefully evaluated it.

•

Nothing is complete yet – we are in the first phase of a process that will take several months to complete.

•

This does not change the way we do business or our commitment to customer service.

•

This is an opportunity to accelerate our strategy, take bolder steps in the marketplace, and serve you with even greater innovation and responsiveness.

Sales leadership discussions with large customers

•

Our board of directors was approached by a consortium of investors with a formal offer to take the company private. We’ve been both public and private before and that has enabled us to deliver innovative products and therapies and great value for our customers.

•

While we were public, we acquired LifeCell. When we were last a privately held company we accelerated V.A.C. Therapy from humble beginnings to one of the most successful medical devices ever created.

•

This doesn’t change the dynamics of our relationship and how we work with you. The operations of our company remain focused on supporting you.

•

Because you are so important to us, we put a premium on talking to you as often as possible as we go through this process.

Advantage Center response to callers

•

We’re here for you today, just as we’ll be here for you tomorrow.

•

This transaction doesn’t change the dynamics of our relationship and how we work with you. We remain focused on supporting you.

•

I would be happy to refer you to (see below) if you have other questions regarding this announcement.

(Note: It is very important that any external inquiries be directed to the appropriate KCI representatives. Please remember that employees are not authorized to respond to external questions on their own. Inquiries should be directed to the below contacts:

Media: Kevin Belgrade (210) 216-1236/ kevin.belgrade@kci1.com and Joe Izbrand

(210) 255-6251 / joe.izbrand@kci1.com

Investors: Todd Wyatt (210) 255-6157 / todd.wyatt@kci1.com

Transaction/Business Development: Adam Rodriguez (210) 255-6197 / adam.rodriguez@kci1.com

Additional Information about the Merger and Where to Find It

This communication may be deemed to be solicitation material in respect of the proposed acquisition of Kinetic Concepts, Inc. (“KCI”) by a consortium comprised of funds advised by Apax Partners, L.P. and Apax Partners LLP, together with controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board. KCI plans to file a proxy statement with the SEC. INVESTORS AND SECURITY HOLDERS OF KCI ARE ADVISED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION. The definitive proxy statement will be mailed to shareholders of KCI. Investors and security holders may obtain a free copy of the proxy statement when it becomes available, and other documents filed by KCI with the SEC, at the SEC’s web site at http://www.sec.gov. Free copies of the proxy statement, when it becomes available, and KCI’s other filings with the SEC may also be obtained from KCI by directing a request to Kinetic Concepts, Inc., Attention: Investor Relations, 8023 Vantage Drive, San Antonio, TX 78230-4726, or by calling 210-255-6157

KCI and its directors, executive officers and other members of its management and employees may be deemed to be soliciting proxies from KCI’s shareholders in favor of the proposed acquisition. Information regarding KCI’s directors and executive officers is available in its 2010 Annual Report on Form 10-K filed with the SEC on March 1, 2011, and definitive proxy statement relating to its 2011 Annual Meeting of Shareholders filed with the SEC on April 15, 2011. Shareholders may obtain additional information regarding the interests of KCI and its directors and executive officers in the proposed acquisition, which may be different than those of KCI’s shareholders generally, by reading the proxy statement and other relevant documents filed with the SEC when they become available.

EX-99.2 3 dex992.htm GLOBAL LEADERSHIP TEAM CALL FREQUENTLY ASKED QUESTIONS Global Leadership Team Call Frequently Asked Questions

Exhibit 99.2

FREQUENTLY ASKED QUESTIONS

as of 7/13 5 am

Q: Why is this transaction taking place?

A: KCI is a financially strong company made up of great people, differentiated global assets and tremendous opportunities for growth. That makes the company naturally attractive to investors and the KCI board of directors has a duty to maximize value for shareholders. After a thorough evaluation, the board concluded that this transaction with Apax Partners, CPP Investment Board and PSP Investments would deliver a substantial return to KCI shareholders. This is a vote of confidence by the consortium in KCI’s business and its team.

Q: Who is this consortium?

A: The consortium is comprised of funds advised by Apax Partners, together with controlled affiliates of Canada Pension Plan Investment Board and the Public Sector Pension Investment Board. If you’d like to know more about them, you can go to their web sites at: www.apax.com, www.cppib.ca and www.investpsp.ca.

Q: What does this mean for KCI?

A: If finalized, this agreement would bring together KCI’s clinical expertise, commercial capabilities and global reach with seasoned private equity partners that have expertise in global markets and a proven track record in healthcare sector investments. They are well respected firms and their interest in KCI represents an endorsement of the company’s market leadership, differentiated products and services and consistently strong performance.

Q: What happens next?

A: Although the agreement has been announced, this is the first step in a process and the transaction has not yet closed. There are several steps that will follow including the filing of a preliminary proxy statement with the U.S. Securities and Exchange Commission, review of the transaction by various regulatory authorities, solicitation of potential alternative acquisition offers during a “go-shop” period and conducting a special meeting of KCI shareholders to vote on approval of the transaction.

Following shareholder approval and other customary closing conditions, it is expected that the transaction would be completed by the fourth quarter of 2011 if no superior offer is received (as described below).

Q: How does a “go-shop” period work and how could it affect the agreement with the consortium?

A: Over the next 40 days there will be a period of time when KCI is permitted to actively solicit, negotiate and accept superior proposals from third parties. This is referred to as a “go-shop” period. After the end of the go-shop period until the shareholder vote, KCI can no longer actively solicit new offers but can continue negotiations with parties who submitted proposals during the go-shop period. Until a shareholder vote is complete, third parties are free to submit competing offers.

Q: What happens if another offer is made for the Company?

A: KCI’s board of directors, with the assistance of its independent advisors, will evaluate any bona fide offer received by the Company to determine whether it is superior to the consortium offer. If the board decides the offer is superior, it can change its recommendation to the shareholders for the current offer or terminate the agreement with the current consortium.

Q: Will KCI’s global headquarters remain in San Antonio?

A: There are no plans to move KCI’s headquarters from San Antonio.

Q: What will the consortium’s management role be? Will they run the company?

A: While all of the details would have to be worked out, it is anticipated that the consortium would construct a new board of directors for KCI. This board will provide guidance and governance, just as KCI’s current board of directors does today.

Q: What does this mean for employees’ jobs?

A: Should the deal close, management will continue to champion employees because of the value they have brought and will continue to bring to the company. It is far too early to speculate, and employees should remain focused on their work and meeting business objectives.

Q: Will employees still work for KCI or will they work for another company?

A: They will continue to work for KCI. That does not change at closing.

Q: What should employees do now?

A: Employees should continue to focus on addressing business needs and executing in a way that meet/exceed customer expectations and achieves the business performance goals set out in the annual operating plan.

Q: Does this transaction weaken KCI’s position against competitors in the marketplace?

A: Not at all. KCI is an industry leader and any potential investment in the company can further drive innovation and will help ensure that we remain well positioned in the marketplace.

Q: What happens to our current leadership – CEO, CFO, global presidents?

A: The consortium firmly believes the senior management and the employees of KCI are key to the company’s success and are committed to building on KCI’s winning culture.

Q: What should employees tell customers?

A: KCI’s business will continue to be about serving customers and it is anticipated that any change that comes about will only enhance the company’s ability to provide customers with the most innovative products and therapies in the marketplace.

Q: What should employees do if they get questions from media or investors or someone else?

A: It is very important that any external inquiries be directed to the appropriate KCI representatives. Employees are not authorized to respond to external questions on their own. Inquiries should be directed to the below contacts:

Media: Kevin Belgrade (210) 216-1232 / kevin.belgrade@kci1.com and Joe Izbrand

(210) 255-6251 / joe.izbrand@kci1.com

Investors: Todd Wyatt (210) 255-6157 / todd.wyatt@kci1.com

Transaction/Business Development: Adam Rodriguez (210) 255-6197 / adam.rodriguez@kcil.com

Q: How will employee benefits change?

A: KCI has a comprehensive array of benefit plans for its employees. The consortium has agreed to maintain compensation and benefit programs that are at least as favorable as KCI’s existing benefit plans for at least one year, should the transaction close.

Q: What will happen to equity grants held by employees who hold stock options, restricted stock or restricted stock units?

Restricted Stock and Time Based Restricted Stock Units (RSUs)

A: All stock options, restricted stock and time-based restricted stock units (vested and unvested) that are still outstanding will be deemed fully earned and vested and converted into cash.

For shares of restricted stock and time-based RSUs, holders will receive an amount equal to $68.50 per share multiplied by the number of restricted shares or time-based RSUs, less any applicable taxes. For stock options, holders will receive an amount equal to the difference between $68.50 per share and the exercise price, multiplied by the number of stock options, less any applicable taxes.

Performance-based Restricted Stock Units (RSUs)

A: As you will recall, for the first time in 2011, KCI awarded performance-based RSUs to all eligible equity plan participants. These grants were designed with “target performance” and “stretch performance” measures based on a cash-flow metric for 2013. Under the terms of the Merger Agreement, performance based RSUs will be deemed earned and vested at “target performance,” which is equal to one-half of the total number of shares reflected in employee E*trade accounts.

Holders of performance-based RSUs deemed to vest at “target performance” will receive an amount equal to $68.50 per share multiplied by the number of performance RSUs deemed to vest, less any applicable taxes.

Q: What will happen to the remaining performance-based RSUs in my E*trade account that are not deemed to be vested above “target performance.”

A: Under the terms of the Merger Agreement, the remaining performance-based RSUs not deemed to be vested above “target performance” will be canceled and deemed to be paid in full.

Q: What happens to ESPP shares that employees are purchasing in the current offering period?

A: The current offering period under the ESPP will continue in effect until the date of closing of the merger, at which time the current offering period will end. Purchases of shares under the ESPP will occur as normal under the ESPP, and those shares will be paid upon closing. Holders of shares under the ESPP will receive an amount equal to $68.50 per share multiplied by the number of ESPP shares held.

Q: What do I do if I have questions about the deal or how it affects me?

A: It is very important that employees feel comfortable asking any questions that come to mind. Many answers may be found by going to KCI Central, where updates will be posted throughout the process. Employees are also encouraged to speak with their manager. For questions regarding benefits, an HR specialist can help.

Additionally, questions can be emailed to questions@kci1.com, or employees can call 210-515-7000 in the United States and +1-888-739-8127 outside the U.S. While answers to every question may not be available right away, KCI management will do its best to get answers and keep employees informed as they go through this process.

Additional Information about the Merger and Where to Find It

EX-99.3 4 dex993.htm EMAIL ANNOUNCEMENT RE MERGER Email Announcement Re Merger

Exhibit 99.3


To:		KCI Employees Worldwide

From:		Cathy Burzik, President & CEO

Date:		June 13, 2011

Today, I want to share some important news with you. After thorough deliberations by our board of directors, we have entered into a merger agreement under which a consortium including Apax Partners, Canada Pension Plan Investment Board and the Public Sector Pension Investment Board will acquire KCI. The board was approached with a formal offer for the company and had the responsibility to consider what would be in the best interests of all our shareholders. After carefully reviewing the offer and negotiating its terms, the board voted unanimously to enter into a definitive agreement with the consortium.

One of the principal reasons this transaction is possible is that investors value what they see in KCI – which is the culmination of years of your hard work, financial discipline, and getting it right in the marketplace. This is an endorsement of our consistent success in bringing high impact solutions and therapies to the medical community and patients. And it’s a statement about the potential for KCI to create additional value in the future.

This transaction is an opportunity to bring together KCI’s clinical expertise, commercial capabilities and global reach with seasoned firms with expertise in world markets, healthcare and strategic investments.

This agreement represents the first step in a process. There will now be a customary 40-day ‘go-shop period’ in which other interested parties could make an alternative offer and our board would be obligated to consider that offer and what is in the best interests of our shareholders.

With this news, some of you may feel the excitement of knowing that change brings with it new opportunity. Others may feel apprehension about what this will mean personally. I want to hear what is on your mind and make sure we put in place all the resources necessary to be able to answer your questions. It is very important that this be a two-way discussion.

To that end, I will hold a global town hall meeting on Thursday, July 14, 2011, to provide you with additional detail on what comes next. Also, leadership throughout the organization will be meeting with you in smaller groups to best understand what questions are on your mind. We will do our best to share as much information as we can throughout this process and will make it a priority to answer your questions.

At the end of this process, and pending shareholder approval, we anticipate that the transaction would be completed this fall. Throughout the process, I encourage you to stay focused on our foremost goal – helping our customers and patients harness the body’s power to heal and regenerate.

Once again, keep in mind – this is about the value we’ve created, and the potential that investors see in KCI to create even more value in the future. Continue to do great work; stay focused on ensuring we execute on our strategy.

I look forward to sharing additional details with you during the Town Hall on Thursday.

Additional Information about the Merger and Where to Find It