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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
MS FINANCIAL, INC.
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(Name of Issuer)
COMMON STOCK, $0.001 PAR VALUE PER SHARE
----------------------------------------
(Title of class of securities)
553566100
--------------
(CUSIP number)
ELLIS A. REGENBOGEN
SEARCH CAPITAL GROUP, INC.
700 NORTH PEARL STREET
SUITE 400
DALLAS, TEXAS 75201
(214) 965-6000
--------------------
(Name, address and telephone number of person
authorized to receive notices and communications)
FEBRUARY 7, 1997
(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 which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [_].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
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CUSIP NO. 553566100
- -------------------------------------------------------------------------------
1) Name of reporting persons
S.S. or I.R.S. identification no. of above persons
SEARCH CAPITAL GROUP, INC. (EMPLOYER IDENTIFICATION NO. 41-1356819)
- -------------------------------------------------------------------------------
2) Check the appropriate box if a member of a group* (a) [_] (b) [_]
- -------------------------------------------------------------------------------
3) SEC use only
- -------------------------------------------------------------------------------
4) Source of funds*
00
- -------------------------------------------------------------------------------
5) Check box if disclosure of legal proceedings is required pursuant to
items 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6) Citizenship or place of organization
DELAWARE
- -------------------------------------------------------------------------------
7) Sole Voting Power: 0
-----------------------------------------------------
NUMBER
OF SHARES 8) Shared Voting Power: 8,040,000
BENEFICIALLY
OWNED BY -----------------------------------------------------
EACH REPORTING
PERSON WITH 9) Sole Dispositive Power: 0
-----------------------------------------------------
10) Shared Dispositive Power: 0
- -------------------------------------------------------------------------------
11) Aggregate amount beneficially owned by each reporting person
- -------------------------------------------------------------------------------
12) Check box if the aggregate amount in row (11) excludes certain
shares* [_]
- -------------------------------------------------------------------------------
13) Percent of class represented by amount in row (11)
77.1%
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14) Type of reporting person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES
TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION
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CUSIP NO. 553566100
- -------------------------------------------------------------------------------
1) Name of reporting persons
S.S. or I.R.S. identification no. of above persons
SEARCH CAPITAL ACQUISITION CORP.
(EMPLOYER IDENTIFICATION NO. 75-2688348)
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2) Check the appropriate box if a member of a group* (a) [_] (b) [_]
- -------------------------------------------------------------------------------
3) SEC use only
- -------------------------------------------------------------------------------
4) Source of funds*
00
- -------------------------------------------------------------------------------
5) Check box if disclosure of legal proceedings is required pursuant to
items 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6) Citizenship or place of organization
DELAWARE
- -------------------------------------------------------------------------------
7) Sole Voting Power: 0
----------------------------------------------------
NUMBER
OF SHARES 8) Shared Voting Power: 8,040,000
BENEFICIALLY
OWNED BY ----------------------------------------------------
EACH REPORTING
PERSON WITH 9) Sole Dispositive Power: 0
----------------------------------------------------
10) Shared Dispositive Power: 0
- -------------------------------------------------------------------------------
11) Aggregate amount beneficially owned by each reporting person
- -------------------------------------------------------------------------------
12) Check box if the aggregate amount in row (11) excludes certain
shares* [_]
- -------------------------------------------------------------------------------
13) Percent of class represented by amount in row (11)
77.1%
- -------------------------------------------------------------------------------
14) Type of reporting person*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES
TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION
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CUSIP NO. 553566100
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1) Name of reporting persons
S.S. or I.R.S. identification no. of above persons
ROBERT D. IDZI
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2) Check the appropriate box if a member of a group* (a) [_] (b) [_]
- -------------------------------------------------------------------------------
3) SEC use only
- -------------------------------------------------------------------------------
4) Source of funds*
00
- -------------------------------------------------------------------------------
5) Check box if disclosure of legal proceedings is required pursuant to
items 2(d) or 2(e) [_]
- -------------------------------------------------------------------------------
6) Citizenship or place of organization
U.S.A.
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7) Sole Voting Power: 0
------------------------------------------------
NUMBER 8) Shared Voting Power: 8,040,000
OF SHARES
BENEFICIALLY ------------------------------------------------
OWNED BY
EACH REPORTING 9) Sole Dispositive Power: 0
PERSON WITH
------------------------------------------------
10) Shared Dispositive Power: 0
- -------------------------------------------------------------------------------
11) Aggregate amount beneficially owned by each reporting person
- -------------------------------------------------------------------------------
12) Check box if the aggregate amount in row (11) excludes certain
shares* [_]
- -------------------------------------------------------------------------------
13) Percent of class represented by amount in row (11)
77.1%
- -------------------------------------------------------------------------------
14) Type of reporting person*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES
TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION
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With respect to each contract, agreement or other document referred to
herein and filed with the Securities and Exchange Commission as an exhibit to
this report, reference is made to the exhibit for a more complete description
of the matter involved, and each such statement shall be deemed qualified in
its entirety by such reference.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $0.001 per share
(the "Shares"), of MS Financial, Inc., a Delaware corporation (the "Issuer"),
which has its principal executive offices at 715 South Pear Orchard Road, Suite
300, Ridgeland, Mississippi 39157.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Search Capital Group, Inc., a
Delaware corporation ("Search"), Search Capital Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Search ("Search Acquisition"), and
Robert D. Idzi ("Idzi"). Search is a financial services company specializing
in the purchase and management of used motor vehicle receivables, typically
those owed by consumer obligors who do not qualify for traditional financing.
Search Acquisition was recently organized by Search for the purpose of
effecting the acquisition of the Issuer and has not engaged in any activities
or business except in connection with the proposed acquisition. The principal
offices of Search are located at 700 North Pearl Street, Suite 400, Dallas,
Texas 75201.
The name, business or residence address, present occupation or
employment and citizenship of Idzi and each of the other executive officers and
directors of Search and Search Acquisition are set forth in Exhibit A hereto
and are incorporated herein by reference.
During the last five years, none of Search, Search Acquisition, Idzi
or the other executive officers and directors of Search or Search Acquisition
has been (a) convicted in a criminal proceeding (excluding traffic violations
and similar misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding were or are 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.
On February 7, 1997, Search, Search Acquisition and the Issuer entered
into an Agreement and Plan of Merger ("Plan of Merger"), pursuant to which,
upon the satisfaction of certain conditions, Search Acquisition will be merged
at the effective time (the "Effective Time") with and into the Issuer (the
"Merger"), the Issuer will become a wholly-owned subsidiary of Search, and each
of the outstanding Shares will be converted into the right to receive a
fraction of a share of Search's common stock, par value $0.01 per share
("Search Common Stock"). A copy of the Plan of Merger is filed herewith as
Exhibit B. In addition, also on February 7, 1997, Search and MS Diversified
Corporation ("MSD"), MS Financial Services, Inc., a wholly-owned subsidiary of
MSD, and Golder Thoma Cressy Rauner Fund IV, L.P., the holders of a majority of
the Issuer's outstanding shares (the "Majority Stockholders"), entered into a
Stockholders Agreement (the "Stockholders Agreement"), pursuant to which the
Majority Stockholders (which hold in the aggregate approximately 77% of the
outstanding Shares) have agreed to vote all of their Shares in favor of the
transactions contemplated by the Plan of Merger and each has granted to Search
Acquisition and Idzi, an irrevocable proxy (with full power of substitution) to
vote such Shares in accordance therewith. The acquisition by Search of the
Issuer and the Issuer's outstanding Shares at the Effective Time will be in
consideration of Search Common Stock issued to holders of Shares at the
Effective Time (although no fractional shares will be issued in the Merger and
cash will be paid in lieu thereof). A copy of the Stockholders Agreement is
filed herewith as Exhibit C. See also Item 4 below.
ITEM 4. PURPOSE OF THE TRANSACTION.
The Plan of Merger provides for the acquisition by Search of the
Issuer through the Merger. By reason of the Merger, each of the outstanding
Shares shall be converted at the Effective Time into the right to receive a
fraction (the "Exchange Ratio") of a share of Search Common Stock which will be
determined by reference to the average prices per share of Search Common Stock
for the 10 trading days (the "Average Search Trading Price") ending on the
fifth business day prior to the special meeting of stockholders of the Issuer
at which the Merger is proposed for approval. The Exchange Ratio will equal
$2.00 (the "Per Share Amount") divided by the Average Search Trading Price,
subject to a maximum of 0.46 and a
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minimum of 0.34. The Per Share Amount and maximum and minimum Exchange Ratios
are subject to adjustment in certain circumstances. Consummation of the Merger
is subject to the satisfaction of certain conditions, including approval of the
transaction by the stockholders of the Issuer holding a majority of its
outstanding Shares and the expiration or early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended ("HSR"), if applicable. The Merger is expected to be submitted to
stockholders for approval in April 1997.
In the Plan of Merger, the Issuer has agreed, prior to the Effective
Time, (i) not to purchase any receivables that do not meet Search's
underwriting criteria or are not otherwise approved by certain officers of
Search, (ii) to allow Search to monitor and evaluate the Issuer's collection
activities, policies and procedures, and (iii) not to change any existing, or
implement any new, policies or procedures without the prior written approval of
certain officers of Search. The Issuer has also agreed to implement collection
policies, procedures and practices as agreed upon by officers of the Issuer and
Search, to consult with Search's officers regarding the Issuer's day-to-day
operations and the implementation of marketing, servicing, collection and
administrative policies, procedures and programs as officers of Search may
approve. The Issuer must pay Search a fee of $100,000 per month for its
assistance, which amount will be credited against any obligation of the Issuer
to pay to Search a termination fee and Search's expenses upon termination of
the Plan of Merger.
In order to induce Search to enter into the Plan of Merger and to
consummate the Merger, Search entered into the Stockholders Agreement with the
Majority Stockholders. The Stockholders Agreement provides, among other
things, that each Majority Stockholder shall vote (or cause to be voted) the
Shares held by such Stockholder as follows:
(1) In favor of the Merger, the execution and delivery by the
Issuer of the Plan of Merger and the approval of the terms thereof and each of
the other actions contemplated by the Plan of Merger;
(2) Against any action or agreement that would result in a breach
in any material respect of any covenant, representation or warranty or any
other obligation or agreement of the Issuer under the Plan of Merger; or
(3) Except as otherwise agreed in writing in advance by Search,
against (i) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Issuer or its
subsidiary; (ii) a sale, lease or transfer of a material amount of assets of
the Issuer, its subsidiary or any securitization trust sponsored by Search (a
"Securitization Trust") or a reorganization, recapitalization, dissolution or
liquidation of the Issuer or its subsidiary; or (iii) any change in the
majority of the board of directors of the Issuer, any material change in the
present capitalization of the Issuer, any amendment to the Issuer's Restated
Certificate of Incorporation or any other material change to the Issuer's
structure or business.
In addition, each Majority Stockholder granted to, and appointed,
Search Acquisition and Idzi, as Treasurer of Search Acquisition, as each such
Majority Stockholder's irrevocable proxy and attorney-in-fact (with full power
of substitution) to vote the Shares in accordance with the above-described
provisions of the Stockholders Agreement.
The Stockholders Agreement terminates upon, among other things, the
termination of the Plan of Merger in accordance with its terms.
Additionally, the Stockholders Agreement contains covenants by each
Majority Stockholder that prior to the Effective Time it shall not (a) solicit
or respond to any inquiry or proposal from any person (other than Search or its
affiliates) with respect to the Issuer or any Securitization Trust that
constitutes or could reasonably be expected to lead to any transaction
described in paragraph (3) above, or (b) directly or indirectly sell or
otherwise transfer or dispose of, or take certain other actions with respect
to, such Majority Stockholder's Shares or any interest therein. The
Stockholders Agreement contains many other covenants, representations and
warranties on the part of the Majority Stockholders, which are not summarized
herein. Reference is made to the Stockholders Agreement filed herewith for
such additional covenants, representations and warranties.
The primary purpose of Search for entering into the Stockholders
Agreement is to empower Search Acquisition to vote the Shares set forth in Item
5 below in the manner specified above.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) Under the terms of the Stockholders Agreement, the Majority
Stockholders have agreed to vote or cause to be voted, in the manner specified
in Item 4 above, and have granted irrevocable proxies with respect to, the
8,040,000 Shares owned by them. The total number of Shares which each of
Search, Search Acquisition and Idzi beneficially owns for purposes of Rule
13d-3 is 8,040,000 or approximately 77% of the outstanding Shares as of
February 7, 1997 (based on the representation of the Issuer contained in
Section 3.5 of the Plan of Merger as to the number of outstanding Shares and
the representations of the Majority Stockholders contained in Section 1.1 of
the Stockholders Agreement as to the number of Shares they beneficially own).
(b) As a result of the proxy and other rights described in Item 4
above, Search Acquisition and Idzi directly share (and Search indirectly
shares, due to its beneficial ownership of all of the outstanding stock of
Search Acquisition) the power to vote or to direct the vote of the 8,040,000
Shares subject to the Stockholders Agreement insofar as they have the power to
vote and direct the vote of such Shares solely with respect to a vote by
stockholders of the Issuer to approve the Merger, the Plan of Merger and the
transactions contemplated thereby, or to approve or oppose any of the other
matters discussed in Item 4 above.
(c) Except as described above, neither Search, Search Acquisition,
Idzi nor any other person named in Exhibit A hereof owns beneficially any
Shares or had effected transactions in Shares during the 60 days preceding the
date of this statement.
(d) The Stockholders Agreement does not give either Search, Search
Acquisition or Idzi any rights to receive dividends on, or any proceeds from
the sale of, the Shares subject to the Stockholders Agreement.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Search has retained Alex Brown & Sons, Incorporated ("Alex Brown") to
assist and advise it on the financial aspects of the Merger and to render an
opinion to Search as to the fairness of the Merger to Search and its
stockholders. In consideration for such services, Search has agreed to
compensate Alex Brown in an amount equal to $175,000 upon completion of the
Merger. Search has also agreed to provide Alex Brown with reimbursement
against certain expenses and indemnification against certain liabilities.
Other than as indicated elsewhere in this Schedule 13D, neither
Search, Search Acquisition, Idzi nor any of the other persons named in Exhibit
A hereto is a party to any contract, arrangement, understanding or relationship
(legal or otherwise) with any person with respect to any securities of the
Issuer, including but not limited to, the transfer or voting of any of the
Issuer's securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Persons referenced in Item 2.
Exhibit B - Agreement and Plan of Merger dated as of February 7, 1997, by
and among Search, Search Acquisition and the Issuer
(incorporated by reference to Exhibit 2.1 to Search's Current
Report on Form 8-K dated February 7, 1997).
Exhibit C - Stockholders Agreement, dated as of February 7, 1997, by and
between Search and certain stockholders of the Issuer
(incorporated by reference to Exhibit 2.1 to Search's Current
Report on Form 8-K dated February 7, 1997).
Exhibit D - Joint Filing Agreement, dated as of February 11, 1997, between
Search Acquisition, Search and Idzi.
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After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
Dated: February 11, 1997
SEARCH CAPITAL GROUP, INC.
By: /s/ George C. Evans
-----------------------------------------
Name: George C. Evans
Title: Chairman of the Board, President
and Chief Executive Officer
SEARCH CAPITAL ACQUISITION CORP.
By: /s/ Ellis A. Regenbogen
-----------------------------------------
Name: Ellis A. Regenbogen
Title: Executive Vice President
/s/ Robert D. Idzi
--------------------------------------------
Robert D. Idzi
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED PAGE
------- -------------
<S> <C> <C>
Exhibit A - Persons referenced in Item 2.
Exhibit B - Agreement and Plan of Merger dated as of February 7, 1997, by and
among Search, Search Acquisition and the Issuer (incorporated by
reference to Exhibit 2.1 to Search's Current Report on Form 8-K
dated February 7, 1997).
Exhibit C - Stockholders Agreement, dated as of February 7, 1997, by and
between Search and certain stockholders of the Issuer (incorporated
by reference to Exhibit 2.1 to Search's Current Report on Form 8-K
dated February 7, 1997).
Exhibit D - Joint Filing Agreement, dated as of February 11, 1997, between
Search Acquisition, Search and Idzi.
</TABLE>
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EXHIBIT A
Set forth below is the information required by Item 2 of Schedule 13D
for each executive officer and director of Search Capital Group, Inc. and
Search Capital Acquisition Corp.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, NAME OF
NAME EMPLOYER AND BUSINESS ADDRESS CITIZENSHIP
- ---- ----------------------------- -----------
<S> <C>
George C. Evans Chairman of the Board, President, U.S.A.
Chief Executive Officer and Director
Search Capital Group, Inc.*
Anthony J. Dellavechia Senior Executive Vice President, U.S.A.
Operations Director
Search Capital Group, Inc.*
President, Search Capital Acquisition Corp.*
Robert D. Idzi Senior Executive Vice President, U.S.A.
Chief Financial Officer and Treasurer
Search Capital Group, Inc.*
Search Capital Acquisition Corp.*
Ellis A. Regenbogen Executive Vice President, U.S.A.
General Counsel and Secretary
Search Capital Group, Inc.*
Search Capital Acquisition Corp.*
Andrew L. Tenney Executive Vice President, Marketing U.S.A.
Search Capital Group, Inc.*
Timothy G. Vorbeck Executive Vice President, Operations U.S.A.
Search Capital Group, Inc.*
Carolyn Malone Senior Vice President and Assistant Secretary U.S.A.
Search Capital Group, Inc.*
Joe B. Dorman Senior Vice President U.S.A.
Search Capital Group, Inc.*
Andrew D. Plagens Vice President, Controller and U.S.A.
Chief Accounting Officer
Search Capital Group, Inc.*
Richard F. Bonini Senior Executive Vice President U.S.A.
First Financial Caribbean Corporation
570 Lexington Avenue, 40th Floor
New York, New York 10022-6824
William H. T. Bush Chairman U.S.A.
Bush-O'Donnell & Co., Inc.
101 South Handley Road, Suite 1025
St. Louis, Missouri 63105
</TABLE>
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<TABLE>
<S> <C> <C>
Luther H. Hodges, Jr. Private Investment Management U.S.A.
325 Brownell-Howland Road
Santa Fe, New Mexico 87501
Frederick S. Hammer Partner U.S.A.
Inter-Atlantic Securities Corporation
712 5th Avenue, 22nd Floor
New York, New York 10019
James F. Leary Vice Chairman, Finance U.S.A.
Search Capital Group, Inc.*
A. Brean Murray President U.S.A.
Brean Murray & Co., Inc.
633 3rd Avenue, 11th Floor
New York, New York 10017
Douglas W. Powell Chairman and CEO U.S.A.
Dominion Capital Corporation
5000 Quorum Drive, Suite 620
Dallas, Texas 75240
Barry W. Ridings Managing Director U.S.A.
Alex. Brown & Sons Incorporated
1290 Avenue of the Americas
10th Floor
New York, New York 10104
</TABLE>
______________________________
* The address for Search Capital Group, Inc. and Search Capital
Acquisition Corp. is 700 North Pearl, Suite 400, Dallas, Texas 75201.
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EXHIBIT D
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the persons named below agree to the joint filing on behalf
of each of them of a Schedule 13D (and any further amendment filed by them)
with respect to the shares of Common Stock, $0.001 par value per share, of MS
Financial, Inc., a Delaware corporation.
Dated: February 11, 1997.
SEARCH CAPITAL GROUP, INC.
By: /s/ George C. Evans
-----------------------------------------
George C. Evans
Chairman of the Board, President
and Chief Executive Officer
SEARCH CAPITAL ACQUISITION CORP.
By: /s/ Ellis A. Regenbogen
-----------------------------------------
Ellis A. Regenbogen
Executive Vice President
/s/ Robert D. Idzi
--------------------------------------------
Robert D. Idzi
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