UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
EPIQ Systems Inc.
(Name of Issuer)
Voting Shares of Common Stock
(Title of Class of Securities)
26882D109
(CUSIP Number)
George Young
St. Denis J. Villere & Company, L.L.C.
601 Poydras St., Suite 1808
New Orleans, LA 70130
(504) 599-4544
With a Copy to:
John Anjier
Liskow & Lewis
701 Poydras St., Suite 5000
New Orleans, LA 70139
(504) 556-4177
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
September 8, 2014
(Date of Event Which Requires Reporting)
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 §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
* | The remainder of this cover page shall be filled out for a reporting persons 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).
SCHEDULE 13D | ||||
CUSIP No. 26882D109 | Page 2 of 5 Pages |
(1) | Name of reporting person
St. Denis J. Villere & Company, L.L.C. | |||||
(2) | Check the appropriate box if a member of a group* (a) ¨ (b) x
| |||||
(3) | SEC use only
| |||||
(4) | Source of funds (see instructions)
OO | |||||
(5) | Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e) ¨
| |||||
(6) | Citizenship or place or organization
Louisiana | |||||
Number of shares beneficially owned by each reporting person with:
|
(7) | Sole voting power
1,447,816 | ||||
(8) | Shared voting power
4,375,739 | |||||
(9) | Sole dispositive power
1,447,816 | |||||
(10) | Shared dispositive power
4,375,739 | |||||
(11) |
Aggregate amount beneficially owned by each reporting person
5,823,555 Shares | |||||
(12) | Check box if the aggregate amount in Row (11) excludes certain shares*
N/A | |||||
(13) | Percent of class represented by amount in Row 9
16.22% | |||||
(14) | Type of reporting person*
IA |
SCHEDULE 13D | ||||
CUSIP No. 26882D109 | Page 3 of 5 Pages |
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to shares of the Voting Shares of Common Stock (the Shares) of Epiq Systems, Inc., a Missouri corporation (the Issuer), whose principal executive offices are located at 501 Kansas Ave, Kansas City, KS 66105.
ITEM 2. IDENTITY AND BACKGROUND
(a) (c) (f) The person filing this Schedule 13G is St. Denis J. Villere & Company, L.L.C., a Louisiana limited liability company (Reporting Person). The Reporting Person is a registered investment advisor which beneficially owns Shares in various accounts under its management and control. The principal business office of Reporting Person is located at 601 Poydras St., Suite 1808, New Orleans, Louisiana 70130.
(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) No Reporting Person has, during the last five years, 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
The 5,823,555 Shares reported herein by Reporting Person were acquired at an aggregate purchase price of approximately $72.6 million. Such Shares were acquired in the ordinary course of business with investment funds in accounts managed by the Reporting Person.
ITEM 4. | PURPOSE OF TRANSACTION |
The Reporting Person acquired the Shares for investment purposes, and such purchases have been made in the Reporting Persons ordinary course of business. The Reporting Person filed an initial Schedule 13G on August 13, 2003. The Schedule 13G was amended from time to time to reflect additional purchases and sales of stock in the ordinary course of business. The Reporting Person believes that the Common Stock at current market prices is undervalued. Representatives of the Reporting Person have, from time to time, engaged in discussions with management of the Issuer regarding, among other things, the Issuers business, assets, prospects and strategic alternatives and direction.
The Reporting Person is filing this Schedule 13D to supersede its previously filed Schedule 13G to report a change in its intentions. The Reporting Person believes that the Issuer should explore strategic alternatives as a means to enhance or maximize shareholder value. The Reporting Person intends to engage in discussions with the Issuer, management, the board of directors, other stockholders and other persons that may relate to governance and board composition, management, operations, business, assets, capitalization, financial condition, strategic plans and the future of the Issuer. The Reporting Person may also take one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D, including but not limited to, solicitation of proxies, and may discuss such actions with the Issuer, management, the board of directors, other stockholders and other persons. On September 8, 2014, the Reporting Person sent a letter (dated September 5, 2014) to the Issuer urging the board of directors to consider strategic alternatives for the Issuer including taking the Issuer private. This letter is attached as Exhibit 99.1. (A copy of the earlier June 5, 2014, letter that is referenced is attached as Exhibit 99.2). In the letter, the Reporting Person announced its intention to nominate a slate of directors for election at the 2015 annual meeting of the shareholders.
Depending on various factors including, without limitation, the outcome of any discussions referenced above, the Issuers financial position and strategic direction, actions taken by the Board, price levels of the Common Stock, other investment opportunities available to the Reporting Person, conditions in the securities market and general economic and industry conditions, the Reporting Person may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional shares of Common Stock and/or other equity, debt, notes, instruments or other securities of the Issuer (collectively, Securities), disposing of any Securities, in the open market or otherwise, at
SCHEDULE 13D | ||||
CUSIP No. 26882D109 | Page 4 of 5 Pages |
anytime and from time to time, and engaging in any hedging or similar transactions with respect to the Securities. The Reporting Person reserves the right to change its intention with respect to any and all matters referred to in subparagraphs (a )-(j) of Schedule 13D.
ITEM 5. | INTEREST IN SECURITIES OF THE ISSUER |
(a) Based upon the Issuers quarterly report on Form 10-Q for the quarterly period ended June 30, 2014, there were 35,899,726 shares of the Common Stock outstanding as of June 30, 2014.
Based on the foregoing, the 5,823,555 shares of the Common Stock (the Subject Shares) beneficially owned by the Reporting Person represents approximately 16.22% of the shares of the Common Stock issued and outstanding.
(b) The Reporting Person has sole power to vote and to dispose of 1,447,816 shares and the shared power to vote and to dispose of 4,375,739 shares.
(c) Reporting Person has not entered into any transactions on behalf of itself or its clients within the last 60 days, except the following:
Trade Date |
Shares Purchased (Sold) | Price Per Share ($) | ||
7/23/14 | (3,200) | $13.64 |
(d) No person (other than the Reporting Person) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
The Reporting Person has no contracts, arrangements, understandings or relationships with any persons with respect to securities of the Issuer.
ITEM 7. | MATERIAL TO BE FILED AS EXHIBITS |
99.1 Letter to Chairman and CEO Tom W. Olofson and copied to the members of the board of directors dated September 5, 2014.
99.2 Letter to Chairman and CEO Tom W. Olofson and independent Member of the Board of Directors W. Bryan Satterlee dated June 5, 2014.
SCHEDULE 13D | ||||
CUSIP No. 26882D109 | Page 5 of 5 Pages |
SIGNATURES
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.
Dated: September 17, 2014
ST. DENIS J. VILLERE & COMPANY, L.L.C. | ||
By: | /s/ George Young | |
Name: | George Young | |
Title: | Member |
Exhibit 99.1
Investment Counsel Since 1911
September 5, 2014
Mr. Tom Olofson
EPIQ Systems
501 Kansas Avenue
Kansas City Kansas 66105
Dear Tom:
As we noted in our letter of June 5, 2014 to you and Bryan Satterlee, we have been dissatisfied with the performance of EPIQ over the past one, five and ten years in comparison to the Russell 3000 index. We also noted that we firmly believe that the public market is severely undervaluing EPIQ. In spite of our belief that the present economic environment is favorable to consideration of strategic alternatives for EPIQ, you have refused to entertain this suggestion.
As owners and managers of 16% of EPIQ, we strongly feel that the board of EPIQ must exercise its fiduciary duty and seek alternatives to remaining public.
Please recall that both you and our firm have the same objectives in unlocking value for shareholders of EPIQ. It is imperative that we do so.
We need your written response to this proposal by October 17, 2014. Please recognize that we have interviewed board candidates and are prepared to nominate them by November 1, 2014 in anticipation of the June 2015 annual shareholders meeting.
Sincerely, | ||||||||
/s/ St. Denis J. Villere | /s/ George G. Villere | /s/ George V. Young | /s/ St. Denis J. Villere III | /s/ Lamar G. Villere | ||||
St. Denis J. Villere | George G. Villere | George V. Young | St. Denis J. Villere III | Lamar G. Villere |
pc:
W. Bryan Satterlee
Edward M. Connolly, Jr.
James A. Byrnes
Joel Pelofsky
Charles Connolly IV
Douglas Gaston
Christopher Olofson
St. Denis J.Villere & Company, LLC, 601 Poydras Street, Suite 1808, New Orleans, LA 70130
Telephone 504-525-0808, 1-877-VILLERE, Facsimile 504-522-2747, www.villere.com
Exhibit 99.2
Investment Counsel Since 1911
June 5, 2014
Mr. Tom Olofson | Via Federal Express |
Mr. Bryan Satterlee
EPIQ Systems Inc.
501 Kansas Avenue
Kansas City KS 66105
Dear Tom & Bryan:
I appreciate your taking time with me last week in New York to review the outlook for EPIQ. As you both know, Villere and Company has patiently owned shares of EPIQ for ourselves and our clients for some time. Our recent 13F filing indicates we own and manage about 16% of the outstanding shares. As long time investors, we are concerned about the poor stock performance of EPIQ and think that now is a good time for you and the board to consider strategic alternatives for the company for the following reasons:
1) | The share price has underperformed the Russell 3000 for the past one, five and ten years. |
2) | EPIQ can avail itself of historically low interest rate structures at present. |
3) | EPIQ trades at a discount to its potential value. |
4) | Visibility in both e-discovery and bankruptcy revenues can support a higher debt structure than is presently used. |
5) | Institutional appetite for EPIQ has waned due to concentrated ownership and low board turnover. |
6) | The expenses of a public company can be eliminated and management can focus on what they do best. |
We believe that the board in the current situation, consistent with its fiduciary duty to its shareholders, is compelled to analyze strategic alternatives to realize additional value for its shareholders. As I noted last week, Villere & Co. is bound to act in the best interests of our clients and we believe our clients are best served by EPIQ reviewing means of unlocking this value. We look forward to discussing these points further with you. I would appreciate a response within 20 days of the date of this letter.
Sincerely, |
/s/ George V. Young |
George V. Young |
St. Denis J. Villere & Company, LLC, 601 Poydras Street, Suite 1808, New Orleans, LA 70130
Telephone 504-525-0808, 1-877-VILLERE, Facsimile 504-522-2747, www.villere.com
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