<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
TENDER OFFER STATEMENT
UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
SUNRISE MEDICAL INC.
(Name of Subject Company)
------------------------
V.S.M. INVESTORS, LLC
V.S.M. HOLDINGS, INC.
V.S.M. ACQUISITION CORP.
(Names of Filing Persons ("Offerors"))
------------------------
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(Title of Class of Securities)
867910-10-1
(CUSIP Number of Class of Securities)
JAMES L. ELROD, JR.
V.S.M. INVESTORS, LLC
245 PARK AVENUE, 41ST FLOOR
NEW YORK, NY 10167
(212) 351-1600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Persons)
------------------------
COPY TO:
Peter Gordon, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
<S> <C>
$239,263,088 $47,853
</TABLE>
<TABLE>
<S> <C>
* Based on the offer to purchase all of the outstanding shares
of Common Stock of the Subject Company at $10.00 cash per
share and all shares of Common Stock outstanding or
represented by stock options and equity-related units
(excluding certain options and units that will not become
vested and exercisable prior to the consummation of this
transaction and after taking into account applicable
exercise prices), as of October 27, 2000.
[ ] Check the box if any part of the fee is offset as provided
by Rule 0-11(a)(2) and identify the filing with which the
offsetting fee was previously paid. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No:
Filing Party:
Date Filed:
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender
offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer: [ ]
</TABLE>
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<PAGE>
This Tender Offer Statement on Schedule TO ("Schedule TO") relates to the
offer by V.S.M. Acquisition Corp. (the "Purchaser"), a Delaware corporation and
a wholly owned subsidiary of V.S.M. Holdings, Inc., a Delaware corporation
("Holdings") and a wholly owned subsidiary of V.S.M. Investors, LLC, a Delaware
limited liability company ("Parent"), to purchase all of the outstanding shares
of common stock, par value $1.00 per share (the "Common Stock"), of Sunrise
Medical Inc. (the "Company"), a Delaware corporation, including the associated
common stock purchase rights (the "Rights" and, together with the Common Stock,
the "Shares"), at a price of $10.00 per share of Common Stock, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated October 30, 2000 (the "Offer to
Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the
related Letter of Transmittal, a copy of which is attached hereto as
Exhibit (a)(2) (which, as they may be amended and supplemented from time to
time, together constitute the "Offer").
The information in the Offer to Purchase, including all schedules and
annexes thereto, is hereby expressly incorporated herein by reference in
response to all the items of this Schedule TO, except as otherwise set forth
below.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(c)(3) None of the natural persons listed on Schedule III of the Offer
to Purchase was convicted in a criminal proceeding during the
past five years (excluding traffic violations or similar
misdemeanors).
(c)(4) None of the natural persons listed on Schedule III of the Offer
to Purchase was a party to any judicial or administrative
proceeding during the past five years (except for matters that
were dismissed without sanction or settlement) that resulted in
a judgement, decree or final order enjoining the person from
future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation
of federal or state securities laws.
ITEM 10. FINANCIAL STATEMENTS.
(a) Financial information. Not applicable.
(b) Pro forma information. Not applicable.
ITEM 11. ADDITIONAL INFORMATION.
(b) Other material information. The information set forth in the Letter of
Transmittal attached hereto as Exhibit (a)(2) is incorporated herein by
reference.
2
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ITEM 12. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
Exhibit (a)(1)(i).................... Offer to Purchase dated October 30, 2000.*
Exhibit (a)(1)(ii)................... Letter of Transmittal.*
Exhibit (a)(1)(iii).................. Notice of Guaranteed Delivery.*
Exhibit (a)(1)(iv)................... Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
Exhibit (a)(1)(v).................... Form of letter to brokers, dealers, commercial banks, trust
companies and other nominees.
Exhibit (a)(1)(vi)................... Form of letter to be used by brokers, dealers, commercial
banks, trust companies and other nominees to their clients.
Exhibit (a)(1)(vii).................. Summary newspaper advertisement, dated October 30, 2000,
published in The Wall Street Journal.
Exhibit (a)(1)(viii)................. Letter, dated October 30, 2000, to Participants and
Beneficiaries in The Sunrise Medical Inc. Profit
Sharing/Savings Plan.
Exhibit (a)(5)(i).................... Joint Press Release dated October 17, 2000, announcing the
tender offer. (This Press Release was filed under cover of
Schedule TO with the Securities and Exchange Commission on
October 17, 2000 and is incorporated herein by reference.)
Exhibit (a)(5)(ii)................... Complaint of Frank Rogers against Sunrise Medical Inc., et.
al. filed in the Superior Court of the State of California,
County of San Diego, on October 17, 2000.
Exhibit (a)(5)(iii).................. Complaint of Jerry Krim against Sunrise Medical Inc., et.
al. filed in the Court of Chancery of the State of Delaware
on October 18, 2000.
Exhibit (a)(5)(iv)................... Complaint of Harbor Finance Partners against Sunrise Medical
Inc., et. al. filed in the Court of Chancery of the State of
Delaware on October 20, 2000.
Exhibit (b)(i)....................... Commitment Letter, dated October 16, 2000, to V.S.M.
Acquisition Corp. from Bankers Trust Company re: Acquisition
Financing.
Exhibit (b)(ii)...................... Commitment Letter, dated October 16, 2000, to V.S.M.
Acquisition Corp. from Bankers Trust Company re:
Subordinated Debt Financing.
Exhibit (c)(i)....................... Opinion of Batchelder & Partners, Inc. dated October 16,
2000 (included as Annex B to the Offer to Purchase).*
Exhibit (c)(ii)...................... Opinion of Deutsche Bank Securities Inc. dated October 16,
2000 (included as Annex A to the Offer to Purchase).*
Exhibit (c)(iii)..................... Presentation to the Company's Board of Directors by
Batchelder & Partners, Inc. dated October 16, 2000.
Exhibit (c)(iv)...................... Presentation to the Company's Board of Directors by Deutsche
Bank Securities Inc. dated October 16, 2000.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
Exhibit (d)(i)....................... Agreement and Plan of Merger, dated as of October 16, 2000,
by and among Sunrise Medical Inc., V.S.M. Acquisition Corp.,
V.S.M. Holdings, Inc., and V.S.M. Investors LLC (included as
Schedule V to the Offer to Purchase).*
Exhibit (d)(ii)...................... Confidentiality/Standstill Agreement dated May 4, 2000,
among the Company, Park Avenue Equity Partners, L.P. and
Vestar Capital Partners IV, L.P.
Exhibit (d)(iii)..................... Form of Letter Agreement, dated October 14, 2000, between
V.S.M. Investors, LLC and each of Ben Anderson-Ray, Geoffrey
Cooper, Jim Fetter, Michael N. Hammes, Raymond Huggenberger,
Steven Jaye, Robert J. Logemann, John Radak, Peter Riley,
Sam Sinasohn and Carey Winkel, respectively, and the forms
of Equity Term Sheet, Employment Agreements, Management Unit
Subscription Agreement, Securityholders Agreement and
Management Agreement attached as exhibits thereto.
Exhibit (d)(iv)...................... Equity Commitment Letter, dated October 16, 2000, from
Vestar Capital Partners IV, L.P. to V.S.M. Acquisition Corp.
Exhibit (f).......................... Statement of Delaware appraisal rights and procedures
(included as Schedule IV to the Offer to Purchase).*
Exhibit (g).......................... None.
Exhibit (h).......................... None.
</TABLE>
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* Included in mailing to stockholders.
4
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ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3. (ITEM NUMBERS BELOW REFER TO
SUCH ITEMS AS CONTAINED IN SCHEDULE 13E-3.)
ITEM 2. Subject Company Information, PARAPARA(d)-(f):
<TABLE>
<S> <C>
(d) Since January 1, 1998, Sunrise Medical Inc. has not paid
dividends to any holders of its Common Stock. The Company's
existing credit facility with Bankers Trust Company, an
affiliate of Deutsche Banc Alex. Brown, and the other
lenders parties thereto limits cash dividends in any
12-month period to 10% of stockholders' equity and 50% of
consolidated net income, and requires that after any such
payment the Company be in compliance with a minimum
debt-to-cash flow ratio.
(e) Not applicable.
(f) There have been no purchases of securities of Sunrise
Medical Inc. by Purchaser, Holdings or Parent during the
past two years.
ITEM 4. Terms of the Transaction, PARAPARA(c)-(f):
(c) The information set forth in the "INTRODUCTION", "SPECIAL
FACTORS--Purpose and Structure of the Transactions",
"SPECIAL FACTORS--Future Plans in Addition to the Merger",
"SPECIAL FACTORS--Interests of Certain Persons in the
Transactions", "SPECIAL FACTORS--The Merger Agreement" and
"THE TENDER OFFER" of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in the "INTRODUCTION", "SPECIAL
FACTORS--Appraisal Rights" and "SCHEDULE IV" of the Offer to
Purchase is incorporated herein by reference.
(e) No provision has been made by Purchaser, Holdings or Parent
to grant unaffiliated shareholders access to corporate files
of Purchaser, Holdings or Parent or to obtain counsel or
appraisal services at the expense of Purchaser, Holdings or
Parent.
ITEM 5. Past Contacts, Transactions, Negotiations and Agreements,
PARAPARA(c) and (e):
(c) The information set forth in the "SPECIAL
FACTORS--Background of the Transactions" of the Offer to
Purchase is incorporated herein by reference.
(e) The information set forth in the "INTRODUCTION", "SPECIAL
FACTORS--Interests of Certain Persons in the Transactions",
"SPECIAL FACTORS--Financing the Transaction", "SPECIAL
FACTORS--The Merger Agreement" and "THE TENDER OFFER" of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. Purposes of the Transaction and Plans or Proposals,
PARAPARA(b) and (c)(8):
(b) The information set forth in "INTRODUCTION", "SUMMARY TERM
SHEET", "SPECIAL FACTORS--Purpose and Structure of the
Transactions", "SPECIAL FACTORS--Certain Effects of the
Transaction" and "SPECIAL FACTORS--The Merger Agreement" of
the Offer to Purchase is incorporated herein by reference.
(c)(8) The information set forth in "INTRODUCTION", "SUMMARY TERM
SHEET", "SPECIAL FACTORS--Purpose and Structure of the
Transactions", "SPECIAL FACTORS--Certain Effects of the
Transaction" and "SPECIAL FACTORS--The Merger Agreement" of
the Offer to Purchase is incorporated herein by reference.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
ITEM 7. Purposes, Alternatives, Reasons and Effects:
(a) The information set forth in the "INTRODUCTION," "SUMMARY
TERM SHEET," "SPECIAL FACTORS--Background of the
Transactions", "SPECIAL FACTORS--Recommendation of the Board
of Directors; Fairness of the Transactions", "SPECIAL FAC-
TORS--Opinions of the Special Committee's Financial
Advisors", "SPECIAL FACTORS--Purpose and Structure of the
Transactions" and "SPECIAL FACTORS--Future Plans in Addition
to the Merger" and "SPECIAL FACTORS--The Merger Agreement"
of the Offer to Purchase is incorporated herein by
reference.
(b)-(d) The information set forth in the "INTRODUCTION," "SUMMARY
TERM SHEET," "SPECIAL FACTORS--Background of the
Transactions", "SPECIAL FACTORS--Recommendation of the Board
of Directors; Fairness of the Transactions", "SPECIAL FAC-
TORS--Opinions of the Special Committee's Financial
Advisors", "SPECIAL FACTORS--Purpose and Structure of the
Transactions", "SPECIAL FACTORS--Certain Effects of the
Transactions", "SPECIAL FACTORS--Future Plans in Addition to
the Merger", "SPECIAL FACTORS--The Merger Agreement",
"SPECIAL FACTORS--Certain Federal Income Tax Consequences"
and "SPECIAL FACTORS--Effect of the Offer on the Markets for
the Shares; Stock Exchange Listing; Exchange Act Registra-
tion" of the Offer to Purchase is incorporated herein by
reference.
ITEM 8: Fairness of the Transaction:
(a)-(f) The information set forth in the "INTRODUCTION," "SUMMARY
TERM SHEET," "SPECIAL FACTORS--Background of the
Transactions", "SPECIAL FACTORS--Recommendation of the Board
of Directors; Fairness of the Transactions", "SPECIAL FAC-
TORS--Opinions of the Special Committee's Financial
Advisors", "SPECIAL FACTORS--Purpose and Structure of the
Transactions", and "SPECIAL FACTORS--Future Plans in
Addition to the Merger" of the Offer to Purchase is
incorporated herein by reference.
ITEM 9: Reports, Opinions, Appraisals and Negotiations:
(a)-(c) The information set forth in the "INTRODUCTION," "SPECIAL
FACTORS--Background of the Transactions", "SPECIAL
FACTORS--Recommendation of the Board of Directors; Fairness
of the Transactions", "SPECIAL FACTORS--Opinions of the
Special Committee's Financial Advisors", "SPECIAL
FACTORS--Purpose and Structure of the Transactions" of the
Offer to Purchase and in Exhibits (c)(1), (2), (3) and
(4) of this Schedule TO is incorporated herein by reference.
The reports, opinions or appraisals mentioned in the
foregoing information incorporated by reference hereto are
available for inspection and copying during normal business
hours at Sunrise Medical Inc., 2382 Faraday Avenue, Suite
200, Carlsbad, California 92008. The telephone number of the
Company at such offices is (760) 930-1500. A copy of any
such material will also be transmitted by the Company to any
interested holder of shares of Company Common Stock (or his
representative designated in writing), upon written request
and at the expense of such stockholder.
ITEM 10. Source and Amounts of Funds or Other Consideration,
PARA(c):
(c) The information set forth in "SPECIAL FACTORS--Financing of
the Transactions", "SPECIAL FACTORS--The Merger Agreement"
and "THE TENDER OFFER--Fees and Expenses" of the Offer to
Purchase is incorporated herein by reference.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
ITEM 12. The Solicitation of Recommendations, PARAPARA(d) and (e):
(d) The information set forth in "INTRODUCTION", "SUMMARY TERM
SHEET", "SPECIAL FACTORS--Background of the Transactions",
"SPECIAL FACTORS--Recommendation of the Board of Directors;
Fairness of the Transactions", "SPECIAL FACTORS--Interests
of Certain Persons in the Transactions" and "SPECIAL
FACTORS--The Merger Agreement" of the Offer to Purchase is
incorporated herein by reference.
(e) The information set forth in "INTRODUCTION", "SUMMARY TERM
SHEET", "SPECIAL FACTORS--Background of the Transactions",
"SPECIAL FACTORS--Recommendation of the Board of Directors;
Fairness of the Transactions", "SPECIAL FACTORS--Interests
of Certain Persons in the Transactions" and "SPECIAL
FACTORS--The Merger Agreement" of the Offer to Purchase is
incorporated herein by reference.
ITEM 14. Persons/Assets, Retained, Employed, Compensated or Used,
PARA(b):
(b) No officer, class of employees or corporate assets of the
Company will be utilized by Purchaser, Holdings or Parent in
the Offer.
</TABLE>
7
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
<TABLE>
<S> <C> <C>
Dated: October 30, 2000
V.S.M. INVESTORS, LLC
By: /s/ JAMES L. ELROD, JR.
-----------------------------------------
Name: James L. Elrod, Jr.
Title: AUTHORIZED SIGNATORY
V.S.M. HOLDINGS, INC.
By: /s/ JAMES L. ELROD
-----------------------------------------
Name: James L. Elrod, Jr.
Title: PRESIDENT
V.S.M. ACQUISITION CORP.
By: /s/ JAMES L. ELROD
-----------------------------------------
Name: James L. Elrod, Jr.
Title: PRESIDENT
</TABLE>
After due inquiry and to the best of his knowledge and belief, each of the
undersigned certifies that the information set forth in this statement to the
extent it constitutes a filing under Rule 13e-3 is true, complete and correct.
<TABLE>
<S> <C> <C>
/s/ MICHAEL HAMMES
-----------------------------------------
Michael Hammes
/s/ BEN ANDERSON-RAY
-----------------------------------------
Ben Anderson-Ray
/s/ RAYMOND HUGGENBERGER
-----------------------------------------
Raymond Huggenburger
/s/ STEVEN JAYE
-----------------------------------------
Steven Jaye
/s/ JOHN RADAK
-----------------------------------------
John Radak
</TABLE>
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<S> <C>
Exhibit (a)(1)(i).................... Offer to Purchase dated October 30, 2000.*
Exhibit (a)(1)(ii)................... Letter of Transmittal.*
Exhibit (a)(1)(iii).................. Notice of Guaranteed Delivery.*
Exhibit (a)(1)(iv)................... Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
Exhibit (a)(1)(v).................... Form of letter to brokers, dealers, commercial banks, trust
companies and other nominees.
Exhibit (a)(1)(vi)................... Form of letter to be used by brokers, dealers, commercial
banks, trust companies and other nominees to their clients.
Exhibit (a)(1)(vii).................. Summary newspaper advertisement, dated October 30, 2000,
published in The Wall Street Journal.
Exhibit (a)(1)(viii)................. Letter, dated October 30, 2000, to Participants and
Beneficiaries in The Sunrise Medical Inc. Profit
Sharing/Savings Plan.
Exhibit (a)(5)(i).................... Joint Press Release dated October 17, 2000, announcing the
tender offer. (This Press Release was filed under cover of
Schedule TO with the Securities and Exchange Commission on
October 17, 2000 and is incorporated herein by reference.)
Exhibit (a)(5)(ii)................... Complaint of Frank Rogers against Sunrise Medical Inc., et.
al. filed in the Superior Court of the State of California,
County of San Diego, on October 17, 2000.
Exhibit (a)(5)(iii).................. Complaint of Jerry Krim against Sunrise Medical Inc., et.
al. filed in the Court of Chancery of the State of Delaware
on October 18, 2000.
Exhibit (a)(5)(iv)................... Complaint of Harbor Finance Partners against Sunrise Medical
Inc., et. al. filed in the Court of Chancery of the State of
Delaware on October 20, 2000.
Exhibit (b)(i)....................... Commitment Letter, dated October 16, 2000, to V.S.M.
Acquisition Corp. from Bankers Trust Company re: Acquisition
Financing.
Exhibit (b)(ii)...................... Commitment Letter, dated October 16, 2000, to V.S.M.
Acquisition Corp. from Bankers Trust Company re:
Subordinated Debt Financing.
Exhibit (c)(i)....................... Opinion of Batchelder & Partners, Inc. dated October 16,
2000 (included as Annex B to the Offer to Purchase).*
Exhibit (c)(ii)...................... Opinion of Deutsche Bank Securities Inc. dated October 16,
2000 (included as Annex A to the Offer to Purchase).*
Exhibit (c)(iii)..................... Presentation to the Company's Board of Directors by
Batchelder & Partners, Inc. dated October 16, 2000.
Exhibit (c)(iv)...................... Presentation to the Company's Board of Directors by Deutsche
Bank Securities Inc. dated October 16, 2000.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO.
-----------
<S> <C>
Exhibit (d)(i)....................... Agreement and Plan of Merger, dated as of October 16, 2000,
by and among Sunrise Medical Inc., V.S.M. Acquisition Corp.,
V.S.M. Holdings, Inc., and V.S.M. Investors LLC (included as
Schedule V to the Offer to Purchase).*
Exhibit (d)(ii)...................... Confidentiality/Standstill Agreement dated May 4, 2000,
among the Company, Park Avenue Equity Partners, L.P. and
Vestar Capital Partners IV, L.P.
Exhibit (d)(iii)..................... Form of Letter Agreement, dated October 14, 2000, between
V.S.M. Investors, LLC and each of Ben Anderson-Ray, Geoffrey
Cooper, Jim Fetter, Michael N. Hammes, Raymond Huggenberger,
Steven Jaye, Robert J. Logemann, John Radak, Peter Riley,
Sam Sinasohn and Carey Winkel, respectively, and the forms
of Equity Term Sheet, Employment Agreements, Management Unit
Subscription Agreement, Securityholders Agreement and
Management Agreement attached as exhibits thereto.
Exhibit (d)(iv)...................... Equity Commitment Letter, dated October 16, 2000, from
Vestar Capital Partners IV, L.P. to V.S.M. Acquisition Corp.
Exhibit (f).......................... Statement of Delaware appraisal rights and procedures
(included as Schedule IV to the Offer to Purchase).*
Exhibit (g).......................... None.
Exhibit (h).......................... None.
</TABLE>
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* Included in mailing to stockholders.
