Sec Form 13D Filing - WSHP Biologics Holdings LLC filing for SURGALIGN HOLDINGS INC. (SRGA) - 2020-01-17

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

RTI Surgical Holdings, Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

74975N105

(CUSIP Number)

Christopher R. Sweeney

WSHP Biologics Holdings, LLC

c/o Water Street Healthcare Partners

444 West Lake Street, Suite 1800

Chicago, Illinois 60606

(312) 506-2900

Copy to:

James S. Rowe

Martin A. DiLoreto, Jr., P.C.

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

(312) 862-2000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

January 13, 2020

(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-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 §240.13d-7 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).

This Amendment No. 1 (this “Amendment”) amends and supplements the Statement on Schedule 13D filed with the Securities and Exchange Commission (the “Commission”) on March 18, 2019 (the “Schedule 13D”) by WSHP Biologics Holdings, LLC, Water Street Healthcare Partners II, L.P., Water Street Healthcare Management II, L.P. and Water Street Healthcare Partners, LLC. The Schedule 13D relates to shares of common stock, par value $0.001 per share (“Common Stock”), of RTI Surgical Holdings, Inc., a Delaware corporation (“Issuer”), issuable upon conversion of shares of series A preferred stock, par value $0.001 per share (“Series A Preferred Stock”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Schedule 13D. Except as otherwise provided herein, all Items of the Schedule 13D remain unchanged.

Item 4 is amended to add the following disclosure at the end such item:

On January 13, 2020, the Issuer entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Ardi Bidco Ltd., a Delaware corporation (the “Buyer”), pursuant to which, and subject to the terms and conditions thereof, the Buyer will acquire the OEM business of the Issuer by acquiring certain subsidiaries of the Issuer. In connection with the execution of the Purchase Agreement, the Investor entered into the support agreement described in Item 6 hereof. The information set forth or incorporated in Item 6 hereof is incorporated herein by reference.

Item 5 is amended and restated in its entirety to read as follows:

(a), (b)

The information contained on the cover pages to this Schedule 13D and the information set forth or incorporated in Items 2, 3, 4 and 6 hereof are incorporated herein by reference.

As of January 13, 2019, the Investor is the record owner of 50,000 shares of Series A Preferred Stock, which are convertible into Common Stock on or after July 16, 2021 (or upon the earlier occurrence of certain specified events) at a price of $4.39, which is subject to adjustment in certain circumstances. The shares of Series A Preferred Stock are convertible into approximately 15,152,761 shares of Common Stock at the current conversion price, representing approximately 17.0% of the outstanding Common Stock, based on the 73,814,831 shares of Common Stock outstanding as of November 4, 2019, plus an additional 15,152,761 shares of Common Stock issuable upon conversion of the Series A Preferred Stock. Due to their relationship with the Investor, the Fund, Water Street Management and the General Partner may be deemed to have shared voting power with respect to the Series A Preferred Stock beneficially owned by the Investor, and as a result, the Fund, Water Street Management and the General Partner may be deemed to have shared beneficial ownership of such shares of Series A Preferred Stock. Each of the Fund, Water Street Management and the General Partner, however, disclaims beneficial ownership of such shares of Series A Preferred Stock, except to the extent of its pecuniary interest therein.

(c)

Except as set forth in this Item 5, none of the Reporting Persons has engaged in any transaction during the past 60 days involving shares of Common Stock or Series A Preferred Stock.

(d), (e)

Not applicable.

Item 6 is amended to add the following disclosure at the end of such item:

Support Agreement

On January 13, 2020, in connection with the execution of the Purchase Agreement, the Investor and the Buyer entered into a support agreement (the “Support Agreement”) relating to the Series A Preferred Stock held by the Investor and any other preferred or common stock of the Issuer that the Investor may subsequently acquire (collectively, the “Covered Shares”). Subject to the terms and

conditions set forth in the Support Agreement, the Investor is required to vote all Covered Shares: (i) in favor of the adoption of the Purchase Agreement and the transactions contemplated thereby (the “Transactions”) and (ii) against any acquisition or similar transaction (other than the Purchase Agreement and the Transactions) and against any action that would be reasonably expected to: (x) result in a breach of or failure to perform, in any material respect, any representation, warranty, covenant or agreement of the Issuer under the Purchase Agreement or of the Investor under the Support Agreement, or (y) prevent, impede, frustrate, interfere with, delay, postpone, adversely affect or nullify any provision of the Purchase Agreement or the Transactions or change in any manner the voting rights of any class of capital stock of the Issuer.

The Support Agreement also prohibits the Investor from selling, transferring or otherwise disposing of Covered Shares except with the written consent of Buyer. The Support Agreement will terminate upon the earliest of (i) the termination of the Purchase Agreement in accordance with its terms; (ii) the receipt of the required vote of the stockholders of the Issuer approving the Transactions; and (iii) any reduction to the base purchase price contemplated by the Purchase Agreement or any other amendment or modification to the Purchase Agreement that is materially adverse to the Investor.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the Support Agreement and the Purchase Agreement, attached hereto as Exhibit 6 and Exhibit 7, respectively, which are incorporated herein by reference.

Item 7 is amended and restated in its entirety to read as follows:

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.

Dated: January 17, 2020