UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(A) AND AMENDMENTS THERETO FILED
PURSUANT TO RULE 13d-2(a).
(AMENDMENT NO. ______________)*
BERLITZ INTERNATIONAL, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $0.10 PER SHARE
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(Title of Class of Securities)
08490010
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(CUSIP Number)
APOLLO MANAGEMENT IV, L.P.
1999 AVENUE OF THE STARS
SUITE 1900
LOS ANGELES, CALIFORNIA 90067
(310) 201-4100
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
OCTOBER 13, 1998
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(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(e), 13d-1(f) or 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 Rule 13d-1(a) for other
parties to whom copies are to be sent.
*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 (the "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).
SEC 1746(12-91)
<PAGE>
SCHEDULE 13D
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CUSIP NO. 08490010 PAGE 1 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
APOLLO INVESTMENT FUND IV, L.P.
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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*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 6,985,338 (1)
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,985,338(1)
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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)
73.3%
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14 TYPE OF REPORTING PERSON*
PN
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(1) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP NO. 08490010 PAGE 2 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
APOLLO OVERSEAS PARTNERS IV, L.P.
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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*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
CAYMAN ISLANDS
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7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 6,985,338 (1)
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,985,338(1)
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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)
73.3%
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14 TYPE OF REPORTING PERSON*
PN
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(1) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D
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CUSIP NO. 08490010 PAGE 3 OF 9 PAGES
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
APOLLO ADVISORS IV, L.P.
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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*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR 2(e)
|_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
0
NUMBER OF -----------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 6,985,338 (1)
OWNED BY -----------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON -----------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,985,338(1)
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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)
73.3%
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14 TYPE OF REPORTING PERSON*
PN
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(1) See Item 5.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
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CUSIP NO. 08490010 PAGE 4 OF 9 PAGES
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ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (the "Statement") relates to the common
stock, par value $0.10 per share (the "Common Stock"), of Berlitz International,
Inc., a New York corporation (the "Company"). The principal executive offices of
the Company are located at 400 Alexander Park, Princeton, New Jersey 08540-6306.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is filed by Apollo Investment Fund IV, L.P., a Delaware
limited partnership ("AIFIV"), Apollo Overseas Partners IV, L.P., an exempted
limited partnership registered in the Cayman Islands ("Overseas IV"), and Apollo
Advisors IV, L.P., a Delaware limited partnership ("Advisors IV"). AIFIV,
Overseas IV and Advisors are referred to collectively as the "Reporting
Persons."
AIFIV and Overseas IV are principally engaged in the business of
investment in securities. Advisors IV is principally engaged in the business of
serving as general partner of AIFIV and managing general partner of Overseas IV
and other investment funds. The principal office of each of the Reporting
Persons is c/o Apollo Advisors IV, L.P., Two Manhattanville Road, Purchase, New
York 10577.
Apollo Capital Management IV, Inc., a Delaware corporation ("Capital
Management IV"), is the general partner of Advisors IV. Capital Management IV is
principally engaged in the business of serving as general partner to Advisors
IV.
Apollo Management IV, L.P., a Delaware limited partnership ("Apollo
Management IV"), serves as manager of the Reporting Persons and manages their
day-to-day operations.
AIF IV Management, Inc., a Delaware corporation ("AIMIV"), is the
general partner of Apollo Management IV. AIMIV is principally engaged in the
business of serving as general partner to Apollo Management IV.
The respective addresses of the principal office of Advisors IV,
Capital Management IV, Apollo Management IV and AIMIV are c/o Apollo Advisors
IV, L.P., Two Manhattanville Road, Purchase, New York 10577.
Apollo Fund Administration IV, LLC, a Delaware limited liability
company ("Administrator"), is the administrative general partner of Overseas IV.
Administration is principally engaged in the business of serving as
administrative general partner of Overseas IV. The principal place of business
of Administration is c/o Apollo Advisors IV, L.P., Two Manhattanville Road,
Purchase, New York 10577.
Attached as Appendix A to Item 2 is information concerning the
principals, executive officers, directors and principal shareholders of the
Reporting Persons and other entities as to which such information is required to
be disclosed in response to Item 2 and General Instruction C to Schedule 13D.
Neither the Reporting Persons nor any of the persons or entities
referred to in Appendix A to Item 2 has, during the last five years, have been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As described herein, AIFIV and Overseas IV (collectively, the
"Purchasers") have agreed to purchase $100,000,000 aggregate principal amount of
the Company's 5% Convertible Exchangeable Subordinated Debentures due 2010,
Series A (the "Convertible Debentures"). The purchase will be financed with cash
on hand.
ITEM 4. PURPOSE OF TRANSACTION.
The Purchasers have agreed, pursuant to a Purchase Agreement, dated as
of October 2, 1998 (the "Debenture Purchase Agreement"), to purchase $100
million in aggregate principal amount of Convertible Debentures. The issuance of
the Convertible Debentures is subject to certain conditions precedent, including
approval by the shareholders of the Company.
The Company will issue the Convertible Debentures to the
Purchasers in order to repay certain existing corporate indebtedness and for
other general corporate purposes.
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CUSIP NO. 08490010 PAGE 5 OF 9 PAGES
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Convertible Debentures
Each Convertible Debenture will be convertible at any time into fully
paid and nonassessable shares of Common Stock of the Company at the initial
conversion price of $33.05 per share of Common Stock (the "Conversion
Price"), such Conversion Price to be adjusted in certain circumstances as
provided for in the Debenture Purchase Agreement.
If for the 30 trading days following the third anniversary of the
issuance of the Convertible Debentures (the "Issue Date") the average of
the closing prices of the Company's Common Stock on the New York Stock
Exchange (the "Average Closing Price") exceeds 120.0% of the Conversion
Price, the Company may, at any time after the 60th trading day after the
third anniversary of the Issue Date, redeem the Convertible Debentures in
whole, but not in part, at a redemption price equal to 100.0% of the
principal amount of such Convertible Debentures, together with accrued
interest. If the Average Closing Price does not exceed 120.0% of the
Conversion Price, the Company may, at any time after the 60th trading day
after the third anniversary of the Issue Date, redeem the Convertible
Debentures in whole, but not in part, at a redemption price equal to (i)
104.0% of the principal amount, if such redemption occurs during the period
from the third anniversary to and including the fourth anniversary of the
Issue Date, (ii) 102.0% of the principal amount, if such redemption occurs
during the period from the fourth anniversary to and including the fifth
anniversary of the Issue Date, and (iii) 100.0% of the principal amount, if
such redemption occurs after the fifth anniversary of the Issue Date, in
each case together with accrued interest.
If the Average Closing Price does not exceed the Conversion Price, the
Purchasers may elect to exchange its Convertible Debentures, in whole, into
fixed-rate non-convertible debentures (the "Fixed Rate Debentures", and
together with the Convertible Debentures, the "Debentures") with a
principal amount equal to the principal amount of the Convertible
Debentures, and with a maturity date on the seventh anniversary of the date
of the exchange. The interest rate of the Fixed Rate Debentures will be
determined in accordance with the formula set forth in the Debenture
Purchase Agreement.
Investors Agreement
The Company and the Purchasers have entered into an Investors
Agreement, dated as of October 2, 1998 (the "Investors Agreement"). The
Investors Agreement provides for the Company's Board of Directors to be
increased from ten to twelve directors and further provides that (i) if the
Purchasers own 50% or more of the aggregate number of shares of Common
Stock into which the Convertible Debentures may be converted into (the
"Shares"), the Purchasers shall be entitled to nominate the two new
directors for the Company's Board of Directors; (ii) if the Purchasers own
at least 25% but less than 50% of the Shares, the Purchasers shall be
entitled to one seat on the Company's Board of Directors, and the size of
the Board of Directors will be decreased from twelve to eleven; and (iii)
if the Purchasers own less than 25% of the Shares, the Purchasers shall not
be entitled to any board representation, and the size of the Board may be
increased or decreased at the option of the Company. In addition, if the
Purchasers are entitled to board representation, the Investors Agreement
provides that the Company may not take, approve or otherwise ratify any of
the following actions without the approval of at least one of the directors
nominated by the Purchasers: (i) any disposition of assets if the
consideration received is in excess of $50 million; (ii) any acquisition if
the consideration paid is in excess of $50 million; (iii) any merger or
consolidation if the consideration received is in excess of $50 million;
(iv) with certain exceptions, any affiliate transaction in excess of $5
million; (v) the incurrence of any additional indebtedness senior in right
of payment to the Debentures and in excess of $50 million; (vi) any
declaration or payment of any dividend to holders of securities junior in
right of payment to the Debentures which exceed (A) 50% of net income of
the Company for the 12 months preceding the date of such payment or (B) $5
million in any 12 month period; and (vii) the issuance of any equity
securities of the Company.
Registration Rights Agreement
The Company and the Purchasers have entered into a Registration Rights
Agreement, dated as of October 2, 1998 (the "Registration Rights
Agreement"). The Registration Rights Agreement provides that commencing on
the second anniversary of the Issue Date, the holders of at least 50% of
the Shares then outstanding may, upon two separate occasions, make a demand
on the Company to effect a registration of any or all of the Shares. If at
any time the Company proposes to file a registration statement with respect
to an offering of Common Stock, then except in certain limited
circumstances the Company shall permit holders of the Shares to include any
or all of the Shares in such offering.
The foregoing descriptions do not purport to be complete and are
qualified in their entirety by reference to the Debenture Purchase Agreement,
the Investors Agreement and the Registration Rights Agreement, a copy of each of
which has been filed as an Exhibit to this Schedule 13D and is incorporated
herein by reference.
The purpose of the transactions by the Reporting Persons described in
this Statement is investment in the Company. Notwithstanding the foregoing, the
Reporting Persons retain the right to change their investment intent, to propose
one or more possible transactions to the Company's board, to acquire additional
shares of common stock from time to time or to sell or otherwise dispose of all
<PAGE>
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CUSIP NO. 08490010 PAGE 6 OF 9 PAGES
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or part of the Convertible Debentures beneficially owned by them (or any shares
of Common Stock into which such Convertible Debentures are converted or any
Fixed Rate Debentures for which such Convertible Debentures are exchanged) in
any manner permitted by law. In the event of a material change in the present
plans or intentions of the Reporting Persons, the Reporting Persons will amend
this Schedule 13D to reflect such change.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) The Reporting Persons have agreed to purchase $100,000,000 in
aggregate principal amount of the Series A Convertible Debentures. Assuming the
conversion of all of the Series A Convertible Debentures as of the date hereof,
the Reporting Persons would own in the aggregate 3,025,718 shares of Common
Stock of the Company, representing approximately 24.1% of the outstanding Common
Stock of the Company. The number of shares of Common Stock into which shares of
Series A Convertible Debentures are convertible may be increased upon the
occurrence of certain events as described in Item 4. Beneficial ownership of
such Series A Convertible Debentures will be acquired as described in Item 3 and
Item 4. See also the information contained on the cover pages to this Schedule
13D, which is incorporated herein by reference.
(b) See the information contained on the cover pages to this Schedule
13D, which is incorporated herein by reference. See also the response to Item 6
below, which is incorporated herein by reference. As described in Item 6, the
Reporting Persons will be able to direct the vote of the shares of Common Stock
beneficially owned by Benesse Corporation in certain circumstances. Benesse
Corporation is a Japanese corporation engaged in the business of publishing. Its
registered offices are at 3-17-17 Minamigata Okayama-shi 700, Japan. Benesse
Corporation reported in its Schedule 13D dated February 18, 1993 that it had
not, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors) or 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.
(c) There have been no reportable transactions with respect to the
Common Stock of the Issuer within the last 60 days by the Reporting Persons.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The response to Items 3 and 4 are hereby incorporated herein by
reference.
Pursuant to a Voting Agreement, dated as of October 2, 1998, among
Benesse Corporation, AIFIV and Overseas IV, Benesse Corporation has agreed to
vote the shares owned by it so as to (i) approve the issuance of the Convertible
Debentures pursuant to the Debenture Purchase Agreement and (ii) elect the
directors appointed by the Purchasers pursuant to the Investors Agreement to the
Board of Directors of the Company. Benesse Corporation is the direct or indirect
record holder and beneficial holder of 6,985,338 shares of Common Stock, which
is approximately 73.3% of the outstanding Common Stock. The Reporting Persons
expressly disclaim beneficial ownership of any securities of the Company owned
by Benesse Corporation.
The foregoing response to this Item 6 is qualified in its entirety by
reference to the Voting Agreement, the full text of which is filed as Exhibit 4
hereto and incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Purchase Agreement, dated as of October 2, 1998, among the
Company, AIFIV and Overseas IV, incorporated by reference to
Exhibit 99.1 of the Company's Current Report on Form 8-K
filed on October 9, 1998.
Exhibit 2 Investors Agreement, dated as of October 2, 1998, among the
Company, AIFIV and Overseas IV, incorporated by reference to
Exhibit 99.5 of the Company's Current Report on Form 8-K
filed on October 9, 1998.
Exhibit 3 Registration Rights Agreement, dated as of October 2, 1998,
among the Company, AIFIV and Overseas IV, incorporated by
reference to Exhibit 99.3 of the Company's Current Report on
Form 8-K filed on October 9, 1998.
<PAGE>
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CUSIP NO. 08490010 PAGE 7 OF 9 PAGES
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Exhibit 4 Voting Agreement, dated as of October 2, 1998, among Benesse
Corporation, AIFIV and Overseas IV, incorporated by
reference to Exhibit 99.6 of the Company's Current Report on
Form 8-K filed on October 9, 1998.
<PAGE>
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CUSIP NO. 08490010 PAGE 8 OF 9 PAGES
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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.
October 13, 1998 APOLLO INVESTMENT FUND IV, L.P.
By: Apollo Advisors IV, L.P., its General Partner
By: Apollo Capital Management IV, Inc.,
its General Partner
By: /s/ Michael D. Weiner
------------------------------------------
Name: Michael D. Weiner
Title: Vice President,
Apollo Capital Management IV, Inc.
APOLLO OVERSEAS PARTNERS IV, L.P.
By: Apollo Advisors IV, L.P., its Managing
General Partner
By: Apollo Capital Management IV, Inc.,
its General Partner
By: /s/ Michael D. Weiner
------------------------------------------
Name: Michael D. Weiner
Title: Vice President,
Apollo Capital Management IV, Inc.
APOLLO ADVISORS IV, L.P.
By: Apollo Capital Management IV, Inc.,
its General Partner
By: /s/ Michael D. Weiner
------------------------------------------
Name: Michael D. Weiner
Title: Vice President,
Apollo Capital Management IV, Inc.
<PAGE>
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CUSIP NO. 08490010 PAGE 9 OF 9 PAGES
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APPENDIX A TO ITEM 2
The following sets forth information with respect to the general
partners, executive officers, directors and principal shareholders of Advisors
IV, Capital Management IV, and Administration. Capitalized terms used herein
without definition have the meanings assigned thereto in the Schedule 13D to
which this Appendix A relates. Except as otherwise indicated in this Appendix A
or in the Schedule 13D to which this Appendix A relates, the principal business
address of each person or entity set forth below is c/o Apollo Advisors IV,
L.P., Two Manhattanville Road, Purchase, New York 10577, and each such person or
entity is a citizen of the United States of America.
The principal business of Advisors IV is to provide advice regarding
investments by, and serving as general partner to, the Reporting Persons, and
the principal business of Capital Management IV is that of serving as general
partner to, the Reporting Persons, and the principal business of Capital
Management IV is that of serving as general partner to Advisors IV.
The directors and principal executive officers of Capital Management IV
are Messrs. Leon D. Black and John J. Hannan. The principal occupation of each
of Messrs. Black and Hannan is to act as an executive officer and director of
Capital Management IV. Messrs. Black and Hannan are also limited partners of
Advisors IV. Mr. Black is the President and director of AIMIV, the general
partner of Apollo Management IV. Mr. Hannan is a Vice President and director of
AIMIV. AIMIV is principally engaged in the business of serving as general
partner of Apollo Management IV.
Messrs. Black and Hannan are also founding principals of Apollo
Advisors, L.P. ("Advisors"), Apollo Advisors II, L.P. ("Advisors II"), Lion
Advisors, L.P. ("Lion"), Apollo Real Estate Advisors, L.P. ("AREA") and Apollo
Real Estate Advisors II, L.P. ("AREAII"). The principal business of Advisors,
Advisors II and Lion is to provide advice regarding investments in securities
and the principal business of AREA and AREA II is to provide advice regarding
investments in real estate and real estate-related investments. The business
address of each of Messrs. Black and Hannan is c/o Apollo Management, L.P., 1301
Avenue of the Americas, New York, New York 10019.
