SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
PILLOWTEX CORPORATION
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(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
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(Title of Class of Securities)
0007215011
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(CUSIP Number)
PATRICK J. DOOLEY
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
590 MADISON AVENUE
NEW YORK, N.Y. 10022-4616
(212) 872-1000
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 19, 1997
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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(b)(3) or (4), check the following box
[ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
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 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).
(Continued on following pages)
Page 1 of 12 Pages
<PAGE>
CUSIP No. 0007215011 13D Page 2 of 12 Pages
1 NAME OF PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO INVESTMENT FUND III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)[x]
(b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 2,469,500
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,708,333
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 2,469,500
WITH
10 SHARED DISPOSITIVE POWER
2,708,333
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,708,333
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.0%
14 TYPE OF PERSON REPORTING*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 0007215011 13D Page 3 of 12 Pages
1 NAME OF PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO OVERSEAS PARTNERS III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 147,583
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,708,333
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 147,583
WITH
10 SHARED DISPOSITIVE POWER
2,708,333
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,708,333
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.0%
14 TYPE OF PERSON REPORTING*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 0007215011 13D Page 4 of 12 Pages
1 NAME OF PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO (U.K.) PARTNERS III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED KINGDOM
7 SOLE VOTING POWER
NUMBER OF 91,250
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,708,333
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 91,250
WITH
10 SHARED DISPOSITIVE POWER
2,708,333
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,708,333
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.0%
14 TYPE OF PERSON REPORTING*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
CUSIP No. 0007215011 13D Page 5 of 12 Pages
1 NAME OF PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
APOLLO ADVISORS II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF -0-
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 2,708,333
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -0-
WITH
10 SHARED DISPOSITIVE POWER
2,708,333
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,708,333
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.0%
14 TYPE OF PERSON REPORTING*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
Page 6 of 12 Pages
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this statement relates is
the common stock, $0.01 par value per share (the "Shares"), of Pillowtex
Corporation, a Texas corporation (the "Issuer"). The principal executive offices
of the Issuer are located at 4111 Mint Way, Dallas, Texas 75237.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(c) and (f):
- ---------------
This Schedule 13D is being filed jointly on behalf of the
following persons (collectively, the "Reporting Persons"): (1) Apollo Investment
Fund III, L.P., a Delaware limited partnership ("Fund III"), (2) Apollo Overseas
Partners III, L.P., a Delaware limited partnership ("Overseas Partners"), (3)
Apollo (U.K.) Partners III, L.P., a limited partnership organized under the laws
of the United Kingdom ("UK Partners" and, together with Fund III and Overseas
Partners, the "Apollo Purchasers") and (4) Advisors (as defined below). The
Reporting Persons are making this joint filing because they may be deemed to
constitute a "group" within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Each of the Apollo Purchasers is principally engaged in the
business of investment in securities. The principal office of each of the Apollo
Purchasers is c/o Apollo Advisors II, L.P., Two Manhattanville Road, Purchase,
New York 10577. Apollo Advisors II, L.P., a Delaware limited partnership
("Advisors"), is the managing general partner of each of the Apollo Purchasers.
Advisors is principally engaged in the business of serving as managing general
partner of the Apollo Purchasers.
Apollo Capital Management II, Inc., a Delaware corporation
("Apollo Capital"), is the general partner of Apollo Advisors. Apollo Capital is
principally engaged in the business of serving as general partner to Advisors.
Apollo Management, L.P., a Delaware limited partnership ("Apollo
Management"), serves as manager of the Apollo Purchasers and manages their
day-to-day operations.
AIF III Management, Inc., a Delaware corporation ("AIM"), is the
general partner of Apollo Management. AIM is principally engaged in the business
of serving as general partner to Apollo Management.
The respective addresses of the principal office of Advisors,
Apollo Capital, Apollo Management and AIM are c/o Apollo Advisors II, L.P., Two
Manhattanville Road, Purchase, New York 10577.
Apollo Fund Administration II LDC, a Cayman Islands LDC
("Administration"), is the administrative general partner of each of Overseas
<PAGE>
Page 7 of 12 Pages
Partners and UK Partners. Administration is principally engaged in the business
of serving as administrative general partner of Overseas Partners and UK
Partners.
The principal place of business of Administration is Apollo Fund
Administration II LDC, c/o CIBC Bank and Trust Company (Cayman) Limited, Edward
Street, Georgetown, Grand Cayman, Cayman Islands, British West Indies.
Apollo Management (UK) Ltd., an English corporation ("Management
UK"), is the resident general partner of UK Partners. Management UK is
principally engaged in the business of serving as resident general partner of UK
Partners. The address of the principal business of Management UK is Hill House,
1 Little New Street, London EC4A 3TR, England.
Attached as Schedule I to this Schedule 13D, and incorporated by
reference into this Item 2, is information concerning the Reporting Persons and
other persons and entities as to which such information is required to be
disclosed in response to Item 2 and General Instruction C to Schedule 13D.
(d) and (e):
- -----------
None of the Reporting Persons, Apollo Capital, Apollo Management,
AIM, Administration, Management UK nor, to the knowledge of the Reporting
Persons, any of the persons or entities referred to in Schedule I has, 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.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the Stock Purchase Agreement (as defined below in
Item 4), the total consideration paid by the Apollo Purchasers in connection
with their purchase of the Preferred Shares (as defined below in Item 4) was
$65,000,000. The acquisition of the Preferred Shares is described below in Item
4.
The Apollo Purchasers obtained funds to make the purchase
described herein through capital contributions from their investors.
ITEM 4. PURPOSE OF TRANSACTION.
The Apollo Purchasers entered into a Preferred Stock Purchase
Agreement dated as of September 10, 1997 with the Issuer (the "Stock Purchase
Agreement") to purchase 65,000 shares of Series A Redeemable Convertible
Preferred Stock of the Issuer (the "Preferred Shares") for general investment
purposes. The Apollo Purchasers retain the right to acquire, or cause to be
acquired, additional securities of the Issuer, to dispose of, or cause to be
disposed, such securities at any time or to change their investment intent,
formulate other purposes, plans or proposals regarding the securities, to the
<PAGE>
Page 8 of 12 Pages
extent deemed advisable in light of general investment and trading policies of
the Reporting Persons market conditions or other factors. In the event of a
material change in the present plans of the Apollo Purchasers, the Reporting
Persons will amend this Schedule 13D to reflect such change.
Except as set forth herein, the Reporting Persons do not have any
plans or proposals which would relate to or result in any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
The terms of the Stock Purchase Agreement are incorporated herein
by reference. The foregoing description of the Stock Purchase Agreement is
qualified in its entirety by the terms of such agreement.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) and (b):
- -----------
Pursuant to the Stock Purchase Agreement, each of Fund III,
Overseas Partners and UK Partners acquired 2,469,500, 147,583 and 91,250
Preferred Shares which are presently convertible into 14.6%, 0.9% and 0.5%,
respectively, and 16.0% in the aggregate, of the outstanding Shares as of
December 31, 1997, assuming the conversion of all of the Preferred Shares held
for the accounts of the Apollo Purchasers. Each Apollo Purchaser, together with
each other Reporting Person, may be deemed to have shared voting and dispositive
power with respect to all Shares held for the accounts of the Apollo Purchasers.
The number of Shares reported herein includes Shares in excess of
the proportionate pecuniary interest, if any, of each Reporting Person in the
Shares.
Pursuant to the terms of the Statement of Resolution of the
Preferred Shares, incorporated by reference in this Schedule 13D as Exhibit 2,
each Preferred Share is convertible into such number of Shares as is determined
by dividing (i) the sum of (A) $1,000 plus (B) any dividends accrued but unpaid,
by (ii) $24 (defined as the "Conversion Price"). The Statement of Resolution
provides that the Conversion Price is adjustable upon certain capital events of
the Issuer (such as certain stock dividends, mergers and other specified
events). The foregoing description of the Statement of Resolution is qualified
in its entirety by the terms thereof.
The statements in this Schedule 13D shall not be construed as an
admission that a Reporting Person is the beneficial owner of any of the Shares
other than those which such Reporting Person may be deemed the beneficial owner
pursuant to the transactions contemplated herein.
(c) The responses to Items 3 and 4 of this Schedule 13D are incorporated
herein.
(d) Not applicable.
(e) Not applicable.
<PAGE>
Page 9 of 12 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The response to Items 3, 4 and 5 of this Schedule 13D and the
Exhibits to this Schedule 13D are incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 - Preferred Stock Purchase Agreement dated as of September 10, 1997
between the Issuer and the Apollo Purchasers (filed as Exhibit
10.2 to the Issuer's Current Report on Form 8-K dated September
10, 1997 as amended by Amendment No. 1 thereto, filed as Exhibit
10.1 to the Issuer's Current Report on Form 8-K dated September
21, 1997 ("Amendment No. 1")).
Exhibit 2 - Form of the Statement of Resolution for the Preferred Shares
(filed as Exhibit B to Amendment No. 1).
<PAGE>
Page 10 of 12 Pages
SIGNATURE
tAfter reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct. In addition, by signing below, the undersigned agrees
that, in accordance with Rule 13d-1(f) of the Securities Exchange Act of 1934,
as amended, this Schedule 13D may be filed jointly on behalf of each of Apollo
Investment Fund III, L.P., Apollo Overseas Partners III, L.P., Apollo (U.K.)
Partners III, L.P. and Apollo Advisors II, L.P.
Dated as of the 6th day of January, 1998.
APOLLO INVESTMENT FUND III, L.P.
By: Apollo Advisors II, L.P.,
its Managing General Partner
By: Apollo Capital Management II, Inc.,
its General Partner
By: /S/ MICHAEL D. WEINER
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
APOLLO OVERSEAS PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
its Managing General Partner
By: Apollo Capital Management II, Inc.,
its General Partner
By: /S/ MICHAEL D. WEINER
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
APOLLO (U.K.) PARTNERS III, L.P.
By: Apollo Advisors II, L.P.,
its Managing General Partner
By: Apollo Capital Management II, Inc.,
its General Partner
By: /S/ MICHAEL D. WEINER
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
<PAGE>
Page 11 of 12 Pages
APOLLO ADVISORS II, L.P.
By: Apollo Capital Management II, Inc.,
its Managing General Partner
By: /S/ MICHAEL D. WEINER
-----------------------------------
Name: Michael D. Weiner
Title: Vice President
<PAGE>
Page 12 of 12 Pages
SCHEDULE I
The following sets forth information with respect to the general
partners, executive officers, directors and principal shareholders of Advisors,
Apollo Capital, Apollo Management, AIM, Administration and Management UK.
Capitalized terms used herein without definition have the meanings assigned
thereto in the Schedule 13D to which this Schedule I relates. Except as
otherwise indicated in this Schedule I or in the Schedule 13D to which this
Schedule I relates, the principal business address of each person or entity set
forth below is c/o Apollo Advisors II, 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 is to provide advice regarding
investments by, and serving as general partner to, the Apollo Purchasers, and
the principal business of Apollo Capital is that of serving as general partner
of Advisors. The principal business of Apollo Management is to serve as the
manager of the Apollo Purchasers. The principal business of AIM is to serve as
general partner to Apollo Management.
The directors of each of Apollo Capital and AIM are Leon D. Black
and John J. Hannan, each of whom are also limited partners of Advisors and
Apollo Management. Messrs. Black and Hannan are also founding principals of
Apollo Advisors, L.P. ("Apollo Advisors"), Lion Advisors, L.P. ("Lion") and
Apollo Real Estate Advisors, L.P. ("AREA"). The principal business of Apollo
Advisors and Lion is to provide advice regarding investments in securities and
the principal business of AREA 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.
Peter Henry Larder, Michael Francis Benedict Gillooly, Ian Thomas
Patrick and Martin William Laidlaw, each of whom is a British citizen, serve as
directors of Administration. Each of the above four individuals is principally
employed by CIBC Bank and Trust Company (Cayman) Limited ("CIBC") in the
following positions: Mr. Larder, Managing Director; Mr. Gillooly, Deputy
Managing Director; Mr. Patrick, Manager-Accounting Services; and Mr. Laidlaw,
Senior Fund Accountant. CIBC is a Cayman Islands corporation which is
principally engaged in the provision of trust, banking and corporate
administration services, the principal address of which is Edward Street, Grand
Cayman, Cayman Islands, British West Indies. It provides accounting,
administrative and other services to Administration pursuant to a contract. Mr.
Leon D. Black is the beneficial owner of the stock of Administration.
