SC 13D: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on October 4, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
Quanta Services, Inc.
(Name of Issuer)
Common Stock, $0.00001 par value
(Title of Class of Securities)
74762E102
(CUSIP Number)
Dale J. Wolf, Secretary, 20 West Ninth Street
Kansas City, Missouri 64105 (816) 421-6600
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
with a copy to:
Dennis P. Wilbert, Esq., Blackwell Sanders Peper Martin LLP, 2300 Main Street
Kansas City, Missouri 64108 (816) 983-8124.
September 21, 1999
(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 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 ss. 240.13d-7(b) 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 ("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 1 of 9
Page 3 of 9
INTRODUCTION
UtiliCorp United Inc., a Delaware corporation ("UtiliCorp"), hereby
files this Statement on Schedule 13D (the "Statement") on behalf of the
Reporting Persons identified in Item 2 below pursuant to the Agreement With
Respect to Schedule 13D attached hereto as an Exhibit.
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the shares of common stock,
par value $0.00001 per share, of Quanta Services, Inc., a Delaware corporation
("Issuer") (the "Common Stock"), issuable on conversion of the Series A
convertible preferred stock, par value $0.00001 per share, of the Issuer
("Convertible Preferred Stock") and shares of Common Stock acquired in open
market and privately negotiated purchases. The principal executive offices of
the Issuer are located at 1360 Post Oak Boulevard, Suite 2100, Houston, Texas
77056.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is filed by UtiliCorp United Inc., a Delaware
corporation ("UtiliCorp"), and Robert K. Green, President and Chief Operating
Officer of UtiliCorp (collectively, the "Reporting Persons").
UtiliCorp is a publicly held company (trading symbol "UCU") whose
executive offices are located at 20 West Ninth Street, Kansas City, Missouri
64105, and its telephone number is (816) 421-6600. UtiliCorp is a multinational
energy and energy services business with regulated utility operations in seven
states within the United States and energy operations in New Zealand, Australia,
the United Kingdom and Canada. UtiliCorp also owns non-utility subsidiaries
involved in energy trading, natural gas gathering, processing and
transportation, energy efficiency services, and various other energy-related
businesses.
Robert K. Green, a United States citizen, resides at 2318 West 59th
Street, Mission Hills, Kansas 66208. Mr. Green is President and Chief Operating
Officer of UtiliCorp, which maintains its executive offices at the location
described above.
During the last five years, the Reporting Persons have not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) and have not been party to a civil proceeding of a judicial or
administrative body of a competent jurisdiction and as a result of such
proceeding was or are 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 violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Securities Purchase Agreement dated September 21, 1999
("Closing Date") between UtiliCorp and the Issuer ("Purchase Agreement"),
UtiliCorp purchased from the Issuer 1,860,000 shares of Convertible Preferred
Stock in the aggregate principal amount of $186,000,000 ("Purchase Price"). The
Convertible Preferred Stock is convertible into Common Stock at the option of
UtiliCorp. UtiliCorp purchased the Convertible Preferred Stock with funds
obtained pursuant to a Credit Agreement among UtiliCorp and numerous banks (with
CitiBank, N.A. as agent).
Between September 2, 1999 and September 29, 1999, UtiliCorp purchased
in a series of broker-assisted purchases on the open market and
privately-negotiated purchases 1,933,685 shares of Common
Page 4 of 9
Stock. The aggregate funding required for these purchases was $50,462,110, all
of which was funded by a Credit Agreement among UtiliCorp and numerous banks
(with CitiBank, N.A. as agent). 1
On June 30, 1999 Robert Green purchased 10,000 shares of Issuer's
outstanding common stock on the open market for an aggregate purchase price of
$390,000 with personal funds.
ITEM 4. PURPOSE OF THE TRANSACTION.
The purchase of the Convertible Preferred Stock of the Issuer was the
result of a negotiated transaction with the Issuer, and it was acquired for
investment purposes. UtiliCorp intends to review its investment in the Issuer on
a continuing basis and, depending upon the price of and other market conditions
relating to the Convertible Preferred Stock, subsequent developments affecting
the Issuer, the Issuer's business and prospects, other investment and business
opportunities available to UtiliCorp and its affiliations, general stock market
and economic conditions, tax considerations and other factors deemed relevant,
may decide to increase or decrease the size of its investment in the Issuer.
UtiliCorp's open market purchases of Common Stock were undertaken for
investment purposes as described in the preceding paragraph. UtiliCorp has also
purchased shares of Common Stock by, as of September 29, 1999, contracting with
21 of the Issuer's record stockholders for the purchase of 1,069,485 shares of
Common Stock for an aggregate purchase price of $27,806,610.2
Robert Green purchased 10,000 shares of Common Stock on the open market
for an aggregate purchase price of $390,000, such purchases were made for
investment purposes.
In addition to the Purchase Agreement, the following documents (as
described herein), which were conditions precedent to the signing of the
Purchase Agreement, are attached as exhibits to this Schedule and incorporated
herein by reference: Stockholder's Voting Agreements (the "Stockholder's
Agreements"), Strategic Alliance Agreement, Investor's Rights Agreement, Fee
Letter Agreement, and Certificate of Designation, Rights, and Limitations of the
Series A Convertible Preferred Stock of Quanta Services, Inc. (the "Certificate
of Designation"). The following summaries of the terms of such agreements are
qualified by reference to the actual agreements.
Purchase Agreement. On September 21, 1999, UtiliCorp and Issuer entered
into the Purchase Agreement which provided for the purchase by UtiliCorp of
Convertible Preferred Stock in the aggregate amount of $186,000,000. The number
of shares of Common Stock issuable upon conversion of the Convertible Preferred
Stock by UtiliCorp will be determined by dividing the price per share of the
Convertible Preferred Stock (i.e., $100) by the conversion price of $30.00
(subject to adjustment for any stock split, combination, and the like)
("Conversion Price"), approximately 6,200,000 shares of Common Stock, on an
as-converted basis, at the Closing Date. The Purchase Agreement includes
provisions customary in commercial investments, including, for purposes of
illustration only, inclusion of an anti-hedging provision (i.e., for a period of
10 years, UtiliCorp shall not engage in transactions intended to reduce its risk
of owning the Common Stock).
Stockholder's Agreements. The irrevocable Stockholder's Agreements
among UtiliCorp, Issuer, and various stockholders owning shares of the Common
Stock of the Issuer (cumulatively,
Page 5 of 9
the "Stockholders"), dated September 21, 1999, obligate the Stockholders to vote
all shares of Common Stock owned by them, or over which they have voting
control, to approve the following proposals: (i) any proposal recommended by
Issuer's Board of Directors for the purpose of enabling UtiliCorp to exit its
investment in the Issuer in the most tax efficient manner; (ii) any proposal
recommended by Issuer's Board of Directors for the purpose of allowing UtiliCorp
to hold shares of the Issuer in the most tax efficient manner; and (iii) any
ancillary proposals that are necessary or appropriate to effectuate the
foregoing proposals. The Stockholder's Agreements terminate automatically if
UtiliCorp's Fully Diluted Ownership Ratio (as defined in the Certificate of
Designation) is less than 5%, and with respect to shares subject to the
Stockholder's Agreements that are subsequently sold by the Stockholders, the
Stockholder's Agreements cease to apply to such shares upon sale.
Strategic Alliance Agreement. On September 21, 1999, UtiliCorp and
Issuer entered into the Strategic Alliance Agreement which provides that the
Issuer is UtiliCorp's preferred contractor in outsourced transmission and
distribution infrastructure construction and maintenance and natural gas
distribution construction and maintenance in all areas serviced by UtiliCorp,
provided that the Issuer provides such services at a competitive cost that is
demonstrably equal to or better than current market rates for such services. The
Strategic Alliance Agreement terminates six years from the Closing Date,
although the parties thereto may engage in business relations with competitors
of the other party and its affiliates during such time. Neither UtiliCorp nor
the Issuer owe the other party any fiduciary duties (in fact, no relationship of
whatever kind or form exists) under the terms of the Strategic Alliance
Agreement.
Fee Letter Agreement. Signed on September 21, 1999 between the Issuer
and UtiliCorp, the Fee Letter Agreement entitles UtiliCorp to receive $3,720,000
for advisory services performed by UtiliCorp.
Investor's Rights Agreement. On September 21, 1999, UtiliCorp and
Issuer entered into the Investor's Rights Agreement which provides, among other
things, that UtiliCorp is entitled to (i) one demand registration with respect
to the Common Stock into which the Convertible Preferred Stock is convertible;
(ii) unlimited "piggyback" registrations; and (iii) a pre-emptive right to
purchase shares of common stock of the Issuer upon the Issuer's issuance of
shares to third parties. The Investor Rights Agreement also provides that
UtiliCorp shall not transfer any portion of its shares of Convertible Preferred
Stock to any competitor of the Issuer.
Certificate of Designation. Executed and filed with the Delaware
Secretary of State's Office on September 21, 1999 by the Issuer, the Certificate
of Designation designates 1,860,000 shares of the Issuer's preferred stock as
Series A Convertible Preferred Stock and sets forth the terms of the Convertible
Preferred Stock. The Certificate of Designation provides that UtiliCorp is
entitled to nominate and elect two directors to the Issuer's Board of Directors;
provided, however, (i) UtiliCorp may nominate a third director if it owns 30% or
more of the outstanding shares of the Issuer on a fully diluted basis, (ii)
UtiliCorp will only be entitled to nominate and elect one director to the
Issuer's Board of Directors if it disposes of at least 50%, but less than 75%,
of the total number of common stock into which the Convertible Preferred Stock
is then convertible, on a fully diluted basis, and (iii) UtiliCorp shall not be
entitled to elect any directors to the Issuer's Board of Directors if it sells
75% or more of the total number of shares of Common Stock into which the
Convertible Preferred Stock is then convertible, on a fully diluted basis. The
Certificate of Designation also provides that, for purposes of illustration
only, (i) the Convertible Preferred Stock is convertible at the discretion of
UtiliCorp without expiration, except that the Issuer is entitled to terminate
any obligation to pay the participating, preferred dividends beyond the sixth
anniversary from the date hereunder if the Common Stock of the Issuer is trading
in the open market above the Conversion Price at that time; and (ii) UtiliCorp
shall have that number of votes equal to the number of shares of Common Stock
into which the Convertible Preferred Stock is convertible at the appropriate
record date.
6 of 9
In addition, the Certificate of Designation entitles UtiliCorp to
receive cash dividends, which are cumulative, at the rate of 0.5% per annum on
the Purchase Price of the Convertible Preferred Stock ("Preferred Dividend");
provided, however, that the Issuer may in its sole discretion terminate the
Preferred Dividend at any time after the sixth anniversary of the Closing Date
if the closing price of the Common Stock is greater than $30.00 per share
(subject to adjustment for any stock split, combination, and the like).
Other than the transactions described herein, the Reporting Persons nor
any of their affiliates have any plan or proposal that would result in any of
the consequences listed in paragraphs (a)-(j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
UtiliCorp beneficially owns 1,860,000 shares of the Convertible
Preferred Stock at September 21, 1999, representing 100% of the outstanding
class as of that date. On an as-converted basis, the Convertible Preferred Stock
beneficially owned by UtiliCorp pursuant to the Purchase Agreement equals
approximately 6,200,0003 shares of Common Stock at September 21, 1999
representing 19.6%4 of the outstanding Common Stock at that date. UtiliCorp also
beneficially owns 1,933,685 shares of the issued and outstanding shares of
Common Stock, acquired by UtiliCorp in privately-negotiated or open market
purchases5. The aggregate amount of the stock described in the preceding
sentence represents 6.1% of the issued and outstanding Common Stock (based on
the number of shares of Common Stock of the Issuer outstanding as of the Closing
Date as represented by the Issuer in the Purchase Agreement) beneficially owned
by UtiliCorp. In aggregate, UtiliCorp beneficially ownership of 8,133,685 shares
of Issuer's outstanding common stock represents 25.7% of Issuer's issued and
outstanding common stock. A schedule of UtiliCorp's transactions in the Issuer's
outstanding common stock is attached as an exhibit.
Robert K. Green beneficially owns 10,000 shares of Issuer's common
stock, or 0.0% of the issued and outstanding shares of Issuer's common stock. A
schedule of UtiliCorp's transactions in the Issuer's outstanding common stock is
attached as an exhibit.
The Reporting Persons collectively own 8,143,685 shares, or 25.7%, of
the issued and outstanding shares of the Issuer's common stock.
Neither the directors or executive officers of UtiliCorp have any
agreements and understandings of any kind with UtiliCorp regarding the holding,
voting, acquisition or disposition of Common Stock. UtiliCorp expressly
disclaims membership in any group and beneficial ownership over any shares held
by third parties.6 Furthermore, Robert K. Green expressly disclaims membership
in any group and beneficial ownership in Common Stock owned and/or controlled by
UtiliCorp or any other third party.
Page 7 of 9
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
See the descriptions of the attached exhibits as described in Item 4
above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(i) Securities Purchase Agreement dated September 21, 1999 between UtiliCorp
and Issuer.
(ii) Form of Stockholder's Voting Agreement dated September 21,
1999 among UtiliCorp, Issuer, and Certain Shareholders (and Schedule of
Participating Shareholders).
(iii)Strategic Alliance Agreement dated September 21, 1999 between the Issuer
and UtiliCorp.
(iv) Investor's Rights Agreement dated September 21, 1999 between the Issuer and
UtiliCorp.
(v) Certificate of Designation, Rights, and Limitations of the Series A
Convertible Preferred Stock of Quanta Services, Inc., dated September 21,
1999.
(vi) Agreement With Respect to Schedule 13D dated September 30, 1999 between
Robert K. Green and UtiliCorp.
(vii)Schedule of Purchases of Issuer's Outstanding Common Stock by the Reporting
Parties, as of September 29, 1999.
Page 8 of 9
SIGNATURES
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, each of the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
Dated: September 30, 1999. UtiliCorp United Inc.
By: /s/ Dale J. Wolf
Name: Dale J. Wolf
Title: Secretary
/s/ Robert K. Green
Robert K. Green
- --------
1 The information contained in this paragraph includes the shares of Common
Stock for which UtiliCorp has entered into a contract for sale with 21 record
stockholders of the Issuer, as described in Item 4 below.
2 UtiliCorp has offer letters outstanding with 28 additional stockholders
for the purchase of additional shares of Common Stock.
3 Represents shares of Common Stock issuable upon conversion of 1,860,000
shares of Series A Convertible Preferred Stock at this date.
4 Based on information provided by Issuer as of September 21, 1999.
5 This figure includes the shares of Common Stock that UtiliCorp has
contracted to purchase from 21 record stockholders of the Issuer, as described
in Item 4 above.
6 This representation is qualified by the fact that, as described in Item 4
above, UtiliCorp has the ability to vote or direct the vote of the shares
subject to the Stockholder's Agreements only in two limited, tax-related
circumstances. UtiliCorp expressly disclaims beneficial ownership to any shares
of Common Stock that are subject to the Stockholder's Agreements.
Page 9 of 9