-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NM2t5pN85SvxLoDlzxQNdL9pDhAc1Ss586hcDyHdnXLR3nFnTKQ0JjvkOkVIlM6T GrLCeSCAvl4ziGIB9bdsjA== 0001164833-10-000038.txt : 20100406 0001164833-10-000038.hdr.sgml : 20100406 20100406102553 ACCESSION NUMBER: 0001164833-10-000038 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20100406 DATE AS OF CHANGE: 20100406 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: infoGROUP Inc. CENTRAL INDEX KEY: 0000879437 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331] IRS NUMBER: 470751545 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-42304 FILM NUMBER: 10733361 BUSINESS ADDRESS: STREET 1: 5711 S 86TH CIRCLE CITY: OMAHA STATE: NE ZIP: 68127 BUSINESS PHONE: 4025934500 MAIL ADDRESS: STREET 1: 5711 SOUTH 86TH CIRCLE CITY: OMAHA STATE: NE ZIP: 68127 FORMER COMPANY: FORMER CONFORMED NAME: INFOUSA INC DATE OF NAME CHANGE: 19981015 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN BUSINESS INFORMATION INC /DE DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC CENTRAL INDEX KEY: 0001164833 IRS NUMBER: 954871957 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 725 SOUTH FIGUERORA ST 39TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90017 BUSINESS PHONE: 2134301000 MAIL ADDRESS: STREET 1: 725 SOUTH FIGUEROA ST 39TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90017 SC 13D 1 iusa13d00.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. __)* Infogroup Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Shares - -------------------------------------------------------------------------------- (Title of Class of Securities) 45670G108 - -------------------------------------------------------------------------------- (CUSIP Number) Anna Marie Lopez Hotchkis and Wiley Capital Management, LLC 725 South Figueroa Street, 39th floor Los Angeles, California 90017-5439 (213) 430-1896 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 5, 2010 - -------------------------------------------------------------------------------- (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 Sections 240.13d-1(e), 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 Section 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting 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). (Continued on following pages) 13D =================== CUSIP No. 45670G108 =================== - ------------==================================================================== NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY) Hotchkis and Wiley Capital Management, LLC 95-4871957 - ------------==================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [ ] 2 - ------------==================================================================== 3 SEC USE ONLY - ------------==================================================================== SOURCE OF FUNDS (See Instructions) 4 OO - ------------==================================================================== CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT 5 TO ITEMS 2(d) OR 2(e) [ ] - ------------==================================================================== CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------==================================================================== SOLE VOTING POWER 7 NUMBER OF 1,390,300 ------------=========================================== SHARES SHARED VOTING POWER BENEFICIALLY 8 OWNED BY -0- ------------=========================================== EACH SOLE DISPOSITIVE POWER 9 REPORTING 3,276,700 PERSON WITH ------------=========================================== SHARED DISPOSITIVE POWER 10 -0- - ------------==================================================================== AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 3,276,700 shares (Ownership disclaimed pursuant to Section 13d-4 of the 1934 Act) - ------------==================================================================== CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES 12 CERTAIN SHARES (See Instructions) [ ] - ------------==================================================================== PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 5.7% - ------------==================================================================== TYPE OF REPORTING PERSON (See Instructions) 14 IA - ------------==================================================================== Item 1. Security And Issuer - ------ ------------------- This statement on Schedule 13D relates to Common Shares of Infogroup, Inc. (the "Company" or "Issuer"). The Company's principal offices are located at 5711 South 86th Circle, Omaha, Nebraska 68127. Item 2. Identity And Background - ------ ----------------------- Preliminary Note: This statement is filed on behalf of Hotchkis and Wiley Capital Management, LLC ("HWCM") and is referred to as "Reporting Person". (i) State or other place of its organization: Delaware (ii) Principal business: registered investment advisor (iii) Address of its principal office: 725 South Figueroa Street, 39th Floor Los Angeles, CA 90017-5439 (iv) Criminal Conviction: HWCM has not been convicted in a criminal proceeding during the last five years. (v) Court or Administrative Proceedings: HWCM has not been a party to a civil proceeding or judicial body, or subject to a judgment or a decree enjoining future violations. Item 3. Source And Amount Of Funds And Other Consideration - ------- -------------------------------------------------- HWCM purchased the Common Shares on behalf of its clients in the ordinary course of business, using the investment capital of its clients. The Common Shares were acquired at an average price of approximately $6.23 per share (including commissions). The amount of investment capital used to purchase the Common Shares was approximately $20,424,547 (including commissions). Item 4. Purpose Of The Transaction - ------ -------------------------- The Reporting Person initially acquired the securities reported on this Schedule 13D as an investment. Following a continued review of the Issuer's business and operations, the Reporting Person has decided to engage in constructive discussions with the Issuer about its business and affairs which may include discussing the structure of management and the board of directors. Although these discussions are not expected or intended to result in acquiring control of the Issuer, they could be regarded as influencing it. Except as described above in this Item 4, the Reporting Person does not have any plans or proposals that relate to, or would result in, any actions or events specified in clauses (a) through (j) of Item 4 to Schedule 13D. The Reporting Person has evaluated and is opposed to a currently proposed transaction between the issuer and CCMP Capital Advisors. The Reporting Person has expressed its opposition to, and disapproval of, this transaction in a letter dated April 5, 2010 and sent to the Issuer's Board of Directors. The Reporting Person may, from time to time, evaluate various other alternatives that it might consider to improve the performance of the Issuer. Depending on various factors, the Reporting Person may take such actions as it deems appropriate including, without limitation, engaging in discussions with management and the Board of Directors of the Issuer, communicating with other shareholders, making proposals to the Issuer concerning the operations of the Issuer, purchasing additional shares of Common Stock or selling some or all of their shares of Common Stock. The Reporting Person may also determine to change its investment intent with respect to the Issuer in the future. In determining whether to sell or retain shares of Common Stock, the Reporting Person will take into consideration such factors as it deems relevant, including, without limitation, Issuer's business and prospects, anticipated future developments, existing and anticipated market conditions, general economic conditions, and other opportunities available to the Reporting Person. The Reporting Person reserves the right to acquire additional securities of the Issuer in the open market, in privately negotiated transactions, or otherwise, to dispose of all or a portion of its holdings in Issuer's securities, or to change its intention with respect to any or all of the matters referred to in this Item 4. Item 5. Interest In Securities Of The Issuer - ------- ------------------------------------ (a) The percentage amount set forth in Row 13 for the cover page filed herewith is calculated based upon the 57,903,615 shares of Common Stock outstanding as of February 19, 2010 reported in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. (b) Number of shares as to which the person has: (i) Sole power to vote or to direct the vote: 1,390,300 (ii) Shared power to vote or to direct the vote: 0 (iii) Sole power to dispose or to direct the disposition of: 3,276,700 (iii) Shared power to dispose or to direct the disposition of: 0 Note that certain of HWCM's clients have retained voting power over the Common Shares that they beneficially own. Accordingly, HWCM has the power to dispose of more Common Shares than it can vote. (c) Information concerning transactions relating to the shares offered through open market transactions by the reporting persons during the past sixty days are listed below. None. (d) The securities as to which this Schedule is filed by HWCM, in its capacity as investment adviser, are held in client custodial accounts for the benefit of the clients. These clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. No such client is known to have such right or power with respect to more than five percent of this class of securities. HWCM disclaims beneficial ownership of all securities owned for the benefit of its clients. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings Or - ------ ------------------------------------------- Relationships With Respect To Securities Of The Issuer ------------------------------------------------------ There are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any other person with respect to any securities of the Company, including but not limited to the transfer or voting of any securities of the Company, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, divisions of profits or loss, or the giving or withholding of proxies. Item 7. Materials To Be Filed As Exhibits --------------------------------- Open letter to the Board of Directors of the Company. 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. Date: April 5, 2010 Hotchkis and Wiley Capital Management, LLC By: /s/ Anna Marie Lopez Name: Anna Marie Lopez Title: Chief Operating Officer EX-1 2 ltr201004.txt HOTCHKIS AND WILEY CAPITAL MANAGEMENT 725 South Figueroa Street, 39th Floor * Los Angeles, California 90017-5439 * Tel 213-430-1000 * Fax 213.430.1001 * www.hwcm.com April 5, 2010 Infogroup Inc. 5711 South 86th Circle Omaha, NE 68127 To the Board of Directors of Infogroup: We are writing to express our outrage at the proposed transaction with CCMP Capital Advisors. The proposed transaction price is a steep discount to Infogroup's fair value and reflects a mismanaged sale process. Hotchkis and Wiley Capital Management became one of the largest holders of Infogroup after the replacement of former management with the current outstanding executive team. We have long believed in the value of Infogroup's unique capabilities and the long-term growth opportunity in this industry. We are confident that under the leadership of Bill Fairfield's team the fundamental value of Infogroup is well in excess of $12 per share. Our belief in the fair value of Infogroup is based on our own analysis, but is confirmed by the figures in the recently released proxy statement: * On page 35 of the proxy, the transaction advisor, Evercore, discloses their calculated trading multiples for comparable companies. This list shows that the median trading multiple for comparable companies is above 8x forward EBITDA. Evercore uses this "analysis" to justify a range of acquisition multiples from 5.5-7.0x forward EBITDA. Evercore does not attempt to explain why a 14-35% takeover discount on an enterprise value basis is appropriate. * On page 35, Evercore shows that the proposed transaction price is approximately equal to the projected discounted cash flow valuation at a 12.5% unlevered cost of capital with a 2% terminal growth rate. We find these cost of capital and growth rate assumptions laughable. * On page 37, Evercore states that their leveraged buyout model yields a 20% IRR based on the transaction price, the implied capitalization of the new entity, and a 2014 exit at 7.5x EBITDA. We believe that this very high IRR belongs to Infogroup's shareholders and should not be given to CCMP. We believe that the low transaction price reflects a deeply flawed sales process. Besides the irresponsible behavior of a former member of the Board in threatening a lawsuit, we believe that poor judgment by the M&A Committee and bad advice from Evercore led to this outrageous outcome. There are many clear flaws in the transaction process: * Infogroup is a strategic asset to many potential bidders, but is being sold to a financial buyer. Board of Directors Infogroup Inc. April 5, 2010 Page 2 of 2 * Infogroup is in the early stages of recovering after a long period of mismanagement. While valuation based on current performance is attractive, current performance does not reflect the full potential of this asset under its current leadership. * Infogroup is a strong business and there is no strategic or financial need to sell the company. In spite of its strength, the M&A Committee acted as if an urgent sale at a large discount to fair value is in the best interests of all shareholders. We intend to vote against this transaction. When their term as directors expires, we intend to vote against all members of the M&A Committee: Gary Morin, Tom Thomas, and Chairman Roger Siboni. We are more than happy to share our view of Infogroup's valuation and potential with individual board members. Regards, /s/ Noah Mayer Noah Mayer Portfolio Manager This letter does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. Investment analyses are proprietary and confidential and generally based on publicly available information (including information obtained from company management). Certain information may have been obtained from proprietary broker-dealer and/or independent third-party research. Information obtained from these sources is considered reliable, but its accuracy or completeness cannot be guaranteed. The research herein is not intended to be, and should not be, relied on for investment advice. Any forecasts and estimates made cannot be guaranteed. The opinions expressed are as of April 5, 2010, and are subject to change and may not be accurate reflections after that date. -----END PRIVACY-ENHANCED MESSAGE-----