UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)<F1>
KinderCare Learning Centers, Inc.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
494-521-20
(CUSIP Number)
KCLC Acquisition Corp., KLC Associates, L.P., KKR Associates (KLC) L.P.,
KKR-KLC L.L.C.
c/o Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street, New York, N.Y. 10019 (212) 750-8300
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
October 3, 1996
(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 / /.
Check the following box if a fee is being paid with this statement / / (A fee
is required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
See Rule 13d-7.)
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.
<PAGE>
[FN]
<F1> The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
AMENDMENT NO. 1 TO SCHEDULE 13D
The Statement on Schedule 13D (the "Schedule 13D") relating to the
common stock, par value $.01 per share, of KinderCare Learning Centers, Inc.
(the "Issuer") as previously filed by the Reporting Persons, consisting of KCLC
Acquisition Corp. ("Newco"), KLC Associates, L.P., KKR Associates (KLC) L.P.
and KKR-KLC L.L.C., is hereby amended and supplemented with respect to the
items set forth below. Capitalized terms used without definition have the
meaning ascribed to such terms in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
On December 27, 1996, the Stockholders and Newco amended the terms of
the Option pursuant to the Voting Agreement Amendment, dated as of December 27,
1996, to the Voting Agreement. Pursuant to such amendment, the Share Exercise
Price was amended from $20.25 per share to $19.00 per share and the Warrant
Exercise Price was amended from $7.75 per warrant to $6.50 per warrant. If
Newco were to exercise the Option in full and pay the Share Exercise Price and
the Warrant Exercise Price in cash, the funds required would be approximately
$195,371,223.50. A copy of the Voting Agreement Amendment is filed as Exhibit
1 hereto and is incorporated herein by reference.
Item 4. Purpose of Transaction
----------------------
On December 27, 1996, the Issuer and Newco amended the terms of the
Merger pursuant to the Merger Agreement Amendment, dated as of December 27,
1996, to the Merger Agreement. Pursuant to such amendment, (i) the cash
election price was amended from $20.25 per share to $19.00 per share and (ii)
the Non-Cash Election Number was amended to 1,381,579. In addition, pursuant
to such amendment, each share of common stock of Newco issued and outstanding
immediately prior to the Effective Time will be converted into a number of
shares of Issuer Common Stock equal to the quotient of (i) 7,828,947 divided by
(ii) the number of shares of common stock of Newco outstanding immediately
prior to the Effective Time. A copy of the Merger Agreement Amendment is filed
as Exhibit 2 hereto and is incorporated herein by reference.
Item 7. Material to be filed as Exhibits
--------------------------------
1. Voting Agreement Amendment, dated as of December 27, 1996, among KCLC
Acquisition Corp. and certain stockholders of KinderCare Learning
Centers, Inc.
2. Merger Agreement Amendment, dated as of December 27, 1996, between
KCLC Acquisition Corp. and KinderCare Learning Centers, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this Statement is true, complete
and correct.
KKR-KLC L.L.C.
By:/s/ CLIFTON S. ROBBINS
Name: Clifton S. Robbins
Title: Member
KKR ASSOCIATES (KLC) L.P.
By KKR-KLC L.L.C., as
General Partner
By:/s/ CLIFTON S. ROBBINS
Name: Clifton S. Robbins
Title: Member
KLC ASSOCIATES, L.P.
By KKR ASSOCIATES (KLC) L.P., as
General Partner
By KKR-KLC L.L.C., as
General Partner
By:/s/ CLIFTON S. ROBBINS
Name: Clifton S. Robbins
Title: Member
KCLC ACQUISITION CORP.
By:/s/ NILS P. BROUS
Name: Nils P. Brous
Title: Vice President and Chief
Financial Officer
DATED: December 31, 1996
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibits
---------- -----------------------
1. Voting Agreement Amendment, dated as of December
27, 1996, among KCLC Acquisition Corp. and certain
stockholders of KinderCare Learning Centers, Inc.
2. Merger Agreement Amendment, dated as of December
27, 1996, between KCLC Acquisition Corp. and
KinderCare Learning Centers, Inc.
<PAGE>
EXHIBIT 1
Conformed Copy
VOTING AGREEMENT AMENDMENT
AMENDMENT, dated as of December 27, 1996 (this "Amendment"), to the
Voting Agreement between KCLC Acquisition Corp. ("Newco"), on the one hand, and
TCW Special Credits Fund II, TCW Special Credits Fund IIb, TCW Special Credits
Fund III, TCW Special Credits Fund IIIb (collectively, the "Special Credits
Limited Partnerships"), TCW Special Credits Fund V - The Principal Fund, a
California limited partnership ("Fund V"), two trusts for which Trust Company
of the West is trustee (the TCW Special Credits Trust and the TCW Special
Credits Trust IIIb (collectively the "TCW Trusts")), three special accounts
managed by TCW Special Credits, a California general partnership (the Common
Fund Account, the Weyerhaeuser Company Master Retirement Trust Account and the
Delaware State Employees Retirement Trust Account (collectively, the "Special
Credit Accounts")), one special account managed by Oaktree Capital Management,
LLC ("Oaktree") (the OCM Inland Steel Industries Separate Account (the "Oaktree
Account; and together with the Special Credits Limited Partnerships, Fund V,
the TCW Trusts and the Special Credit Accounts, the "Funds")), and Oaktree, a
California limited liability company (the "Stockholder"), as investment manager
of the Funds, on the other hand, dated as of October 3, 1996 (the "Voting
Agreement").
W I T N E S S E T H :
WHEREAS, pursuant to the Voting Agreement, the Stockholder and the
Funds have agreed, among other things, to vote the Subject Shares in favor of
the Merger, the adoption by the Company of the Merger Agreement and the
approval of the terms thereof and each of the other transactions contemplated
by the Merger Agreement;
WHEREAS, Newco and the Company have agreed that certain provisions of
the Merger Agreement be amended in the manner provided for in the Merger
Agreement Amendment, dated as of the date hereof (the "Merger Agreement
Amendment"); and
WHEREAS, Newco and the Stockholder and the Funds have agreed that
certain provisions of the Voting Agreement be amended in the manner provided
for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Voting Agreement.
2. Amendments to Voting Agreement.
------------------------------
(a) Definitions. As used in the Voting Agreement,
<PAGE>
(i) the term "Agreement" shall mean the voting agreement between
Newco, on the one hand, and the Stockholder and the Funds, on the
other hand, as such agreement has been amended by this Amendment.
(ii) the term "Merger Agreement" shall mean the merger agreement
between Newco and the Company dated as of October 3, 1996, as amended
by the Merger Agreement Amendment, and
(iii) the term "Merger" shall mean the merger of Newco with and
into the Company pursuant to the terms and conditions of the Merger
Agreement (as amended by the Merger Agreement Amendment).
(b) Amendment to Section 3. Section 3(g) of the Voting Agreement is
hereby amended by deleting the amount 1,296,296 which appears in the
fourth line thereof and substituting in lieu thereof the amount 1,381,579.
(c) Amendment to Section 4. Section 4(e) of the Voting Agreement is
hereby amended by (i) deleting the amount $20.25 which appears in the
sixth line thereof and substituting in lieu thereof the amount $19.00 and
(ii) deleting the amount $7.75 which appears in the eighth line thereof
and substituting in lieu thereof the amount $6.50.
(d) Amendment to Section 5. Section 5(a) of the Voting Agreement is
hereby amended by deleting the amount $20.25 which appears in the
fourteenth line thereof and substituting in lieu thereof the amount
$19.00.
(e) Amendment to Section 6. Section 6 of the Voting Agreement is
hereby amended by (i) deleting the amount 1,296,296 which appears in the
tenth line thereof and substituting in lieu thereof the amount 1,381,579
and (ii) deleting the amount 432,099 which appears in the twelfth line
thereof and substituting in lieu thereof the amount 460,526.
3. Amendments to Form of Stockholders' Agreement.
---------------------------------------------
(a) Amendment to Section 4. Section 4 of the form of Stockholders'
Agreement is hereby amended by deleting the amount 432,099 which appears
in the fourth line thereof and substituting in lieu thereof the amount
460,526.
(b) Amendment to Section 6. Section 6(a) of the form of
Stockholders' Agreement is hereby amended by deleting the amount 864,198
which appears three times therein and substituting in lieu thereof the
amount 921,053.
4. Representations and Warranties of the Stockholder. The
Stockholder hereby represents and warrants to Newco that the Stockholder has
all requisite power and authority to enter into this Amendment, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
This Amendment has been duly authorized, executed and delivered by the
Stockholder and constitutes a valid and binding obligation of the Stockholder
enforceable in accordance with its terms.
5. Representations and Warranties of the Funds. Each Fund hereby,
severally and not jointly, represents and warrants to Newco that such Fund has
all requisite power and authority to enter into this Amendment, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
<PAGE>
This Amendment has been duly authorized, executed and delivered by such Fund
and constitutes a valid and binding obligation of such Fund enforceable in
accordance with its terms.
6. Representations and Warranties of Newco. Newco hereby
represents and warrants to the Stockholder and the Funds that this Amendment
has been duly authorized, executed and delivered by Newco and constitutes a
valid and binding obligation of Newco enforceable in accordance with its terms.
7. Miscellaneous.
-------------
(a) Except as expressly amended, modified and supplemented hereby,
the provisions of the Voting Agreement are and shall remain in full force
and effect.
(b) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(c) This Amendment may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, each of Newco, the Stockholder and each Fund has
caused this Agreement to be signed by its signatory thereunto duly authorized,
as of the date first written above.
KCLC ACQUISITION CORP.
By:/s/ Nils P. Brous
Name: Nils P. Brous
Title: Vice President
TCW SPECIAL CREDITS FUND II
TCW SPECIAL CREDITS FUND IIb
TCW SPECIAL CREDITS FUND III
TCW SPECIAL CREDITS FUND IIIb
By: TCW SPECIAL CREDITS,
General Partner
By: TCW Asset Management Co.,
Managing General Partner
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
By: /s/ Bruce Karsh
Name: Bruce Karsh
Title: Authorized Signatory
TCW SPECIAL CREDITS FUND V - THE PRINCIPAL
FUND
By: TCW ASSET MANAGEMENT CO.,
General Partner
By: OAKTREE CAPITAL MANAGEMENT,
LLC Manager
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Managing Director
and General Counsel
By: /s/ Stephen Kaplan
Name: Stephen Kaplan
Title: Principal
<PAGE>
TCW SPECIAL CREDITS TRUST
TCW SPECIAL CREDITS TRUST IIIb
BY: TRUST COMPANY OF THE WEST,
Trustee
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
By: /s/ Bruce Karsh
Name: Bruce Karsh
Title: Authorized Signatory
COMMON FUND ACCOUNT
WEYERHAEUSER COMPANY MASTER
RETIREMENT TRUST ACCOUNT
DELAWARE STATE EMPLOYEES RETIREMENT
TRUST ACCOUNT
By: TCW SPECIAL CREDITS,
Investment Manager
By: TCW Asset Management Co.,
Managing General Partner
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Authorized Signatory
By: /s/ Bruce Karsh
Name: Bruce Karsh
Title: Authorized Signatory
OCM INLAND STEEL INDUSTRIES SEPARATE
ACCOUNT
By: OAKTREE CAPITAL MANAGEMENT, LLC,
Investment Manager
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Managing Director and
General Counsel
By: /s/ Stephen Kaplan
Name: Stephen Kaplan
Title: Principal
<PAGE>
OAKTREE CAPITAL MANAGEMENT, LLC,
By: /s/ Kenneth Liang
Name: Kenneth Liang
Title: Managing Director
and General Counsel
By: /s/ Stephen Kaplan
Name: Stephen Kaplan
Title: Principal
<PAGE>
EXHIBIT 2
Conformed Copy
MERGER AGREEMENT AMENDMENT
AMENDMENT, dated as of December 27, 1996 (this "Amendment"), to the
Agreement and Plan of Merger between KCLC Acquisition Corp. ("Newco") and
KinderCare Learning Centers, Inc. (the "Company"), dated as of October 3, 1996
(the "Merger Agreement").
W I T N E S S E T H :
WHEREAS, pursuant to the Merger Agreement, Newco and the Company have
approved the terms and conditions of the business combination between Newco and
the Company to be effected by the merger (the "Merger") of Newco with and into
the Company; and
WHEREAS, Newco and the Company have agreed that certain provisions of
the Merger Agreement be amended in the manner provided for in this Amendment.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms used but not defined herein
shall have the meanings given to them in the Merger Agreement.
2. Amendments to Merger Agreement.
------------------------------
(a) Definitions. As used in the Merger Agreement,
(i) the term "Agreement" shall mean the merger agreement among
the parties hereto, dated as of October 3, 1996, and the amendments
thereto entered into on the date hereof,
(ii) the term "Merger" shall mean the merger of Newco with and
into the Company pursuant to the terms and conditions of the
Agreement (as amended as of the date hereof) and
(iii) the term "Voting Agreement" shall mean the voting
agreement between Newco, on the one hand, and the Stockholder and the
Funds, on the other hand, as such agreement has been amended as of
the date hereof.
(b) Amendment to Article 2.
(i) Section 2.1(a) of the Merger Agreement is hereby amended by
deleting the amount 7,345,679 which appears in the fifth line thereof
and substituting in lieu thereof the amount 7,828,947.
(ii) Section 2.1(c)(ii) of the Merger Agreement is hereby
amended by deleting the amount $20.25 which appears in the fourth
line thereof and substituting in lieu thereof the amount $19.00.
<PAGE>
(iii) Section 2.4(a) of the Merger Agreement is hereby amended
by deleting the amount 1,296,296 which appears in the fifth line
thereof and substituting in lieu thereof the amount 1,381,579.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants to Newco that:
(a) The Company has all necessary corporate power and authority to
execute and deliver this Amendment, to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Amendment by the Company and the
consummation by the Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action and no
other corporate proceedings on the part of the Company are necessary to
authorize this Amendment or to consummate the transactions so contemplated
(other than, with respect to the Merger, the approval of the Agreement (as
amended hereby) by the holders of a majority of the outstanding shares of
Company Common Stock if and to the extent required by the DGCL, and the
filing of appropriate merger documents as required by the DGCL). This
Amendment has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery hereof by
Newco, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The Board
of Directors of the Company has approved this Amendment and the
transactions contemplated hereby (including but not limited to the Merger)
so as to render inapplicable hereto and thereto the limitation on business
combinations contained in Section 203 of the DGCL (or any similar
provision). The Board of Directors of the Company has approved the Voting
Agreement (as amended) and the transactions contemplated thereby so as to
render inapplicable thereto the limitation on business combinations
contained in Section 203 of the DGCL (or any similar provision). As a
result of the foregoing actions, the only vote required to authorize the
Merger is the affirmative vote of a majority of the outstanding shares of
Company Common Stock.
(b) The Company has received the opinion of the Financial Adviser,
dated the date of this Amendment, to the effect that the consideration to
be received in the Merger by the Company's stockholders is fair to the
holders of the Company Common Stock from a financial point of view. The
aggregate fees payable to the Financial Advisor will not exceed $2.75
million.
(c) The Board of Directors of the Company, at a meeting duly called
and held, has by unanimous vote of those directors present (who
constituted 100% of the directors then in office) (i) determined that the
Agreement (as amended by this Amendment) and the transactions contemplated
thereby, including the Merger, and the Voting Agreement and the
transactions contemplated thereby, taken together, are fair to and in the
best interests of the stockholders of the Company, and (ii) resolved to
recommend that the holders of the shares of Company Common Stock approve
the Agreement (as amended by this Amendment) and the transactions
contemplated therein, including the Merger.
<PAGE>
4. Representations and Warranties of Newco. Newco hereby represents
and warrants to the Company that:
(a) Newco has all necessary corporate power and authority to enter
into this Amendment, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery
and performance of this Amendment by Newco and the consummation by Newco
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Newco other than filing and
recordation of appropriate merger documents as required by the DGCL. This
Amendment has been duly executed and delivered by Newco and, assuming due
authorization, execution and delivery by the Company, constitutes a legal,
valid and binding obligation of Newco enforceable against it in accordance
with its terms.
(b) Attached as Annexes A-1, A-2 and A-3 hereto are true and
complete copies of the letters addressed to the Company, dated the date
hereof, which amend, modify and/or supplement the letters attached as
Annexes A-1, A-2 and A-3 to the Disclosure Schedules issued in connection
with the financing of the transactions contemplated by the Merger
Agreement. The terms and conditions of the letters attached as Annexes A-
1 to A-3 of the Disclosure Schedule, as supplemented by Annexes A-1 to A-3
hereto, are satisfactory to Newco.
5. Miscellaneous.
-------------
(a) Except as expressly amended, modified and supplemented hereby,
the provisions of the Merger Agreement are and shall remain in full force
and effect.
(b) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(c) This Amendment may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, Newco and the Company have caused this Amendment
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
KINDERCARE LEARNING CENTERS, INC.
By:/s/ Philip L. Maslowe
Title: Executive Vice President
and Chief Financial Officer
KCLC ACQUISITION CORP.
By:/s/ Nils P. Brous
Title: Vice President
