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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _________)
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ICO, INC.
(Name of Issuer)
Common Stock, with no par value 449294206
(Title of class of securities) (CUSIP number)
Christopher N. O'Sullivan
TRAVIS STREET PARTNERS, LLC
Bank One Center
910 Travis Street, Suite 2150
Houston, Texas 77002
with copy to:
Steven D. Rubin, Esq.
Weil, Gotshal & Manges LLP
700 Louisiana, Suite 1600
Houston, Texas 77002
(Name, address and telephone number of person authorized
to receive notices and communications)
December 26, 2000
(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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 12 pages)
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<TABLE>
<S> <C>
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1
NAME OF REPORTING PERSON Travis Street Partners, LLC
ss. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON 76-0657668
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: WC
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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: Texas
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER 1,138,300
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,138,300
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING
PERSON: 1,138,300
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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): 5.02%
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14 TYPE OF REPORTING PERSON: 00
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2
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1 NAME OF REPORTING PERSON Timothy J. Gollin
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: PF, OO
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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: United States
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER 1,138,300
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,138,300
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING
PERSON: 1,138,300
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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): 5.02%
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14 TYPE OF REPORTING PERSON: IN
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3
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1 NAME OF REPORTING PERSON Christopher N. O'Sullivan
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON ###-##-####
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [x]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: PF, OO
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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: United States
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NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER 1,138,300
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
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PERSON WITH 10 SHARED DISPOSITIVE POWER: 1,138,300
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING
PERSON: 1,138,300
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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): 5.02%
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14 TYPE OF REPORTING PERSON: IN
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</TABLE>
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ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (the "Statement") relates to
the common stock, with no par value (the "Shares"), of ICO, Inc., a Texas
corporation (the "Company"). The principal executive offices of the Company are
located at 11490 Westheimer, Suite 1000, Houston, Texas 77077.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by and on behalf of Travis
Street Partners, LLC ("TSP"), Timothy J. Gollin ("Gollin") and Christopher N.
O'Sullivan (individually "O'Sullivan"; together with Gollin, the "TSP Managers";
and, together with Gollin and TSP, the "Reporting Persons"). TSP is a Texas
limited liability company, the managers of which are the TSP Managers. The
principal business of TSP is the making, holding and disposing of investments,
including securities of the Company. The present principal occupation of Gollin
is private investments. The present principal occupation of O'Sullivan is
President and CEO of O'Sullivan Oil & Gas Company, Inc. During the last five
years, none of the Reporting Persons has (a) been convicted in a criminal
proceeding or (b) been 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.
The business address of each of the Reporting Persons is
Bank One Center, 910 Travis Street, Suite 2150, Houston, Texas 77002.
The TSP Managers are both citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The aggregate amount of funds required to purchase the
aggregate of 1,138,300 Shares owned by TSP was $2,108,412, including brokerage
commissions and 28,000 Shares contributed to TSP by members of TSP. All funds
used to purchase Shares were obtained from the working capital of TSP.
Capital contributions by O'Sullivan to TSP with respect to
O'Sullivan's membership interest in TSP in the amount of $422,400, including
$31,000 in the form of 16,000 Shares, were funded by O'Sullivan from personal
assets or, as to $23,250 in the form of Shares, from assets of family trusts for
which O'Sullivan directs investments.
Capital contributions by Gollin to TSP with respect to
Gollin's membership interest in TSP in the amount of $303,600 were funded by A.
John Knapp, one of the Nominees referred to below, under a letter agreement
which defines the terms under which Gollin and Knapp share in gains relating to
Gollin's investment in TSP. A copy of Gollin's agreement with Knapp is attached
hereto as Exhibit 1. In a separate informal agreement between Knapp and two
private individuals, such individuals participate in Knapp's agreement with
Gollin.
ITEM 4. PURPOSE OF THE TRANSACTION
Commencing on August 28, 2000, TSP members that
subsequently contributed Shares to TSP upon formation of TSP in October 2000
and, after the formation of TSP, TSP purchased Shares, believing that the Shares
were undervalued in comparison to the Company's underlying asset values and
represented a favorable investment opportunity. TSP believes that a sale of the
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Company is the optimal way to maximize shareholder value and can best be
advocated by electing independent directors to the board of directors of the
Company (the "ICO Board").
Article 2, Section 2.13 of the Company's Bylaws provides
generally that if a shareholder intends to nominate persons for election to the
ICO Board at the Company's annual meeting of shareholders, the shareholder must
notify and submit specified information with respect thereto to the Company in
writing during a narrowly defined "window" of not more than 120 days nor less
than 90 days before the anniversary date of the previous annual meeting. In
accordance with information and time requirements set forth in Article 2,
Section 2.13 of the Bylaws of the Company, which TSP reserves the right to
challenge, on December 8, 2000, TSP delivered to the Secretary of the Company a
letter (the "Nomination Notice") which provides written notice of TSP's intent
to nominate Messrs. A. John Knapp, James D. Calaway and Charles T. McCord, III
(the "Nominees") as candidates for election as directors of the Company at the
Company's 2001 Annual Meeting of Shareholders.
On December 20, 2000, O'Sullivan and Gollin, in their
capacity as TSP Managers, met with Dr. Asher O. Pacholder, Chairman of the Board
and Chief Financial Officer of the Company, and Dr. Sylvia A. Pacholder, Chief
Executive Officer, President and Secretary of the Company (collectively, the
"Company Representatives"), to discuss, in general, the Company's businesses and
operations. At such meeting, the TSP Managers explained their belief that the
Shares are undervalued and that there was an opportunity to increase shareholder
value, most likely through a sale of the Company. The TSP Managers further
explained that TSP is an interested buyer of the Company's oilfield services
business, its plastics business or the whole company. The Company
Representatives assured the Reporting Persons that any offer would receive the
full consideration of the ICO Board.
TSP delivered an offer letter (the "Offer Letter") to ICO
in the morning of December 20, 2000 that reads as follows:
TRAVIS STREET PARTNERS, LLC
910 Travis
Suite 2150
Houston TX 77002
(713) 759-2030
fax (713) 759-2040
VIA COURIER
20 December 2000
Dr. Asher O. Pacholder, Chairman & CFO
ICO Inc.
11490 Westheimer
Suite 1000
Houston TX 77077
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Dear Dr. Pacholder:
Thank you for the opportunity you gave us today to meet with you and your wife
to discuss our investment in ICO Inc. ("ICO" or the "Company").
At our meeting, you and Mrs. Pacholder indicated your interest in receiving a
specific proposal from Travis Street Partners, LLC ("TSP") with respect to a
possible transaction involving ICO. Bearing this in mind, we are outlining below
several possible alternatives for your consideration:
1. As we explained in our meeting, we believe that ICO's Board of
Directors can best maximize shareholder value through the sale of the
Company or one or both of its main operating divisions. As a major ICO
shareholder, TSP favors such a sale.
2. TSP believes that ICO's Board of Directors should, in accordance with
its fiduciary obligations, seek the highest possible price for the
Company's assets. For our part, TSP is prepared to make a compelling
all-cash offer for these assets, subject to the following general
conditions:
a. TSP is prepared to make a friendly fully-financed
offer to acquire ICO at a price of $2.85 per common
share, a premium of approximately 100% to yesterday's
closing price.
b. Alternatively, TSP is prepared to make a friendly
fully-financed offer to acquire ICO's oilfield
services business at a price in the range of 5x TTM
EBITDA. TSP cannot currently quantify this offer
further because we are unable to ascertain the
financial position of this business (specifically,
balance sheet data for the oilfield services
business) from ICO's public documents.
c. TSP'soffers would be conditioned on (i) satisfactory
completion of due diligence; (ii) execution of
mutually agreeable arrangements with current ICO
senior management; and (iii) mutual agreement as to
nondisclosure of any TSP offer or terms thereof
during the due diligence period.
d. TSP could increase either of its offers under (a) and
(b) above based on the results of its due diligence
investigation.
e. TSP would be prepared to enter into a limited
standstill agreement with respect to additional stock
purchases, which would run contemporaneously with our
due diligence period.
3. As we discussed in our meeting, we are preparing to file the necessary
proxy materials required for the annual ICO shareholders' meeting in
March. As an alternative, we welcome the opportunity to pursue a
friendly transaction with ICO, provided:
a. we receive your written consent to pursue a
transaction in accordance with the terms of this
letter no later than 12:00 noon on Friday, December
22, 2000; and
b. we negotiate and execute a mutually satisfactory
agreement for the sale of the Company or the oilfield
services business no later than December 31, 2000, in
order to provide us with a subsequent two week window
to conduct due diligence and finalize our offer to
the Board.
Thank you once again for giving us the opportunity to explain our position more
clearly. We look forward to your speedy reply.
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Very truly yours,
TRAVIS STREET PARTNERS, LLC
by: Christopher N. O'Sullivan, Manager
cc: Dr. Sylvia A. Pacholder, President & CEO - ICO Inc.
Steve Rubin, Esq. - Weil, Gotshal & Manges LLP
* * * * * *
After 5:00 p.m., C.S.T., on December 22, 2000, Dr. Asher O.
Pacholder delivered a letter to TSP that reads as follows:
ICO
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Dr. Al. O. Pacholder, Chairman of the Board 11490 Westheimer, Suite 1000
Houston, Texas 77077
Fax: 281-721-4222
Phone: 281-721-4200
December 22, 2000
VIA FACSIMILE AND MAIL
----------------------
Mr. Christopher N. O'Sullivan
Managing Member
Travis Street Partners, LLC
910 Travis, Suite 2150
Houston, TX 77002
Dear Mr. O'Sullivan:
We have received your letter dated December 20, 2000, in
which you threaten a costly and disruptive proxy contest unless we consent in
writing, within 48 hours, to pursue a transaction with you in accordance with
the terms of your highly conditional expression of interest, and also execute an
agreement by December 31 for a sale to you.
ICO's board of directors and management are committed to
building value for all ICO shareholders. The directors of ICO have unanimously
determined that the process you suggest in your letter would be inconsistent
with that goal.
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Thank you for your interest in ICO.
Yours sincerely,
Asher O. Pacholder
Chairman of the Board of Directors
and Chief Financial Officer
* * * * * *
Although critical of the expedited process proposed by TSP in the Offer Letter
with respect to a possible friendly sale of the Company, the foregoing letter
from Dr. Asher O. Pacholder failed to address the financial merits of TSP's
$2.85 per share offer described in the Offer Letter.
As a result of the foregoing developments, the Reporting
Persons intend to review their investment in the Company on a continuing basis
and, depending on various factors, including the Company's business, affairs and
financial position, other developments concerning the Company, the price level
of the Shares, conditions in the securities markets and general economic and
industry conditions, as well as other investment opportunities available to
them, may in the future take such actions with respect to their investment in
the Company as they deem appropriate in light of the circumstances existing from
time to time. In particular, the Reporting Persons may also acquire additional
Shares (subject to availability of Shares at prices deemed favorable) in the
open market, in privately negotiated transactions or otherwise, and may contact
the Company, the Company Representatives or other representatives of the Company
or other persons interested in the Company, including members of the ICO Board
who are not family relatives of the Company Representatives, or persons
interested in financing the Reporting Persons, for the purpose of discussing the
Company and the matters referred to in the Offer Letter.
Alternatively, while it is not the present intention of the
Reporting Persons to do so, the Reporting Persons reserve the right to dispose
of some or all of their Shares in the open market or in privately negotiated
transactions to one or more purchasers, or otherwise depending upon the course
of action that the Reporting Persons pursue, market conditions and other
factors.
In addition, in light of the Company's response to the
Offer Letter, the Reporting Persons intend to move forward to seek
representation on the ICO Board at its 2001 Annual Meeting of Shareholders on
the basis of the Nomination Notice and otherwise to influence the Company to
promptly conduct an auction process to effect a negotiated sale, merger or other
disposition of the Company (or all or substantially all of its assets) to the
highest bidder. TSP (or one of its affiliates) may be a bidder, and reserves the
right to be participate, alone or with others, in any sales process, but would
not expect to receive any preferential treatment. If TSP (or one of its
affiliates) acquires all or a portion of the Company or its assets, TSP may
itself effect a negotiated sale, merger or other disposition of all or a portion
of the assets acquired.
Although the foregoing represents the range of activities
presently contemplated by the Reporting Persons with respect to the Shares, it
should be noted that the possible activities of the Reporting Persons are
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subject to change at any time and it should not be assumed that the Reporting
Persons will take any of the foregoing actions.
Except as set forth above, as of the date of this Statement
none of the Reporting Persons has any plans or proposals, which relate to or
would result in any of the actions set forth in parts (a) through (j) of Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date of this Statement, TSP beneficially
owned in the aggregate 1,138,300 Shares constituting 5.02% of the outstanding
Shares (the percentage of Shares owned being based upon 22,686,987 Shares
outstanding on December 18, 2000, as set forth in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2000).
Each of the TSP Managers possesses shared voting and
investment power over, and may be deemed to beneficially own, Shares which TSP
beneficially owns. Each of the TSP Managers disclaims beneficial ownership of
such Shares for all other purposes.
(b) The responses to Items 7-11 on each of pages 2-4 hereof
which relate to voting and disposition of Shares with respect to each Reporting
Person are incorporated herein by reference.
(c) Except as set forth on Exhibit 2, the Reporting Persons
have not engaged in any transactions in the Shares during the past sixty days.
(d) No other person is known to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds from the
sale of, the Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
To the best of the knowledge of the Reporting Persons,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) among the Reporting Persons or between the Reporting Persons and any
other person with respect to any securities of the Company, including but not
limited to transfer or voting of any of the 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. The
business and affairs of TSP are conducted in accordance with the Regulations of
Travis Street Partners, LLC, which provide generally for customary rights of the
members thereof in respect of distributions by, or upon the dissolution of, TSP.
In addition, as described in Item 3 above, a letter agreement exists between
Gollin and A. John Knapp with respect to capital contributions made by Gollin to
TSP with respect to Gollin's membership interest in TSP.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following Exhibits are filed herewith:
1. Gollin Letter Agreement
2. Acquisition of Shares Effected by TSP During
Past 60 Days
3. Joint Filing Agreement
[The remainder of this page intentionally left blank.]
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SIGNATURES
After reasonable inquiry and to the best of their knowledge
and belief, the undersigned certify that the information contained in this
Statement is true, complete and correct.
Dated: December 28, 2000
TRAVIS STREET PARTNERS, LLC
By: /s/ Christopher N. O'Sullivan
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Christopher N. O'Sullivan, Manager
/s/ Timothy J. Gollin
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Timothy J. Gollin
/s/ Christopher N. O'Sullivan
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Christopher N. O'Sullivan
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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1. Gollin Letter Agreement
2. Acquisition of Shares Effected by TSP During Past 60 Days
3. Joint Filing Agreement
