TRANSACTION VALUATION* |
$ | 124,999,940.63 | |||||
AMOUNT OF FILING FEE** |
$ | 14,512.49 | |||||
* | Estimated for purposes of calculating the amount of the filing fee only. The amount assumes the purchase of a total of 1,904,761 shares of the outstanding common stock at a price of $62.625 per share in cash. | |
** | The amount of the filing fee equals $116.10 per $1 million of the transaction value and is estimated in accordance with Rule 0-11 under the Securities Exchange Act of 1934. | |
þ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the
offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule
and the date of its filing. Amount Previously Paid: $14,512.49 Form or Registration No.: Schedule TO Filing Party: Credit Acceptance Corporation Date Filed: February 9, 2011 |
SIGNATURE | ||||||||
EXHIBIT INDEX |
1. | The following rows are hereby added to the end of the table following the ninth paragraph of the Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Shares Agreements, Arrangements or Understandings section of the Offer to Purchase on page 37 thereof: |
Brett A. Roberts
|
Chief Executive Officer | 13,100 | $ | 9.25 | February 9, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 10,000 | $ | 64.50 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 918 | $ | 64.60 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 7 | $ | 64.63 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,067 | $ | 64.70 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 8 | $ | 64.765 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 951 | $ | 64.80 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 49 | $ | 64.85 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 100 | $ | 64.90 | February 9, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 5,900 | $ | 9.25 | February 9, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 5,900 | $ | 65.00 | February 9, 2011 | Open market sale | ||||||||
Michael W. Knoblauch
|
Senior Vice President Loan Servicing | 15,000 | $ | 9.885 | February 10, 2011 | Exercise of employee stock options | ||||||||
Michael W. Knoblauch
|
Senior Vice President Loan Servicing | 15,000 | $ | 65.00 | February 10, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 14,484 | $ | 9.25 | February 11, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.00 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.03 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 2,000 | $ | 65.06 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.08 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.10 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 2,000 | $ | 65.15 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 3,000 | $ | 65.20 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 2,000 | $ | 65.24 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,484 | $ | 65.30 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 3,516 | $ | 9.25 | February 11, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 516 | $ | 65.35 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.40 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.43 | February 11, 2011 | Open market sale |
2
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.45 | February 11, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 3,494 | $ | 9.25 | February 15, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 2,979 | $ | 9.885 | February 15, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 2,000 | $ | 65.29 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.35 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.40 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.42 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,473 | $ | 65.44 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 6,527 | $ | 9.885 | February 15, 2011 | Exercise of employee stock options | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 500 | $ | 65.32 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 500 | $ | 65.35 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.40 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.44 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,527 | $ | 65.45 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 981 | $ | 65.48 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 9 | $ | 65.50 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 10 | $ | 65.505 | February 15, 2011 | Open market sale | ||||||||
Brett A. Roberts
|
Chief Executive Officer | 1,000 | $ | 65.55 | February 15, 2011 | Open market sale | ||||||||
John P. Neary
|
Chief Information Officer | 389 | $ | 70.40 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
John P. Neary
|
Chief Information Officer | 222 | $ | 70.34 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
Douglas W. Busk
|
Senior Vice President and Treasurer | 396 | $ | 70.40 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
Douglas W. Busk
|
Senior Vice President and Treasurer | 320 | $ | 70.34 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
Charles A. Pearce
|
Chief Legal Officer | 417 | $ | 70.40 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
Kenneth S. Booth
|
Chief Financial Officer | 598 | $ | 70.40 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock | ||||||||
Steven M. Jones
|
President | 2,874 | $ | 70.40 | February 18, 2011 | Shares withheld to pay taxes on vested restricted stock |
2. | The Certain Financial Information section of the Offer to Purchase on page 25 thereof is hereby amended and restated as follows: |
3
For the Years Ended | ||||||||
December 31, | ||||||||
(In thousands, except ratios and per share data) | 2010 | 2009 | ||||||
Revenue: |
||||||||
Finance charges |
$ | 388,050 | $ | 329,437 | ||||
Premiums earned |
32,659 | 33,605 | ||||||
Other income |
21,426 | 17,622 | ||||||
Total revenue |
442,135 | 380,664 | ||||||
Costs and expenses: |
||||||||
Salaries and wages |
61,327 | 66,893 | ||||||
General and administrative |
26,432 | 30,391 | ||||||
Sales and marketing |
19,661 | 14,808 | ||||||
Provision for credit losses |
10,037 | (12,164 | ) | |||||
Interest |
47,752 | 32,399 | ||||||
Provision for claims |
23,429 | 19,299 | ||||||
Total costs and expenses |
188,638 | 151,626 | ||||||
Income from continuing operations before provision for income taxes |
253,497 | 229,038 | ||||||
Provision for income taxes |
83,390 | 82,992 | ||||||
Income from continuing operations |
170,107 | 146,046 | ||||||
Discontinued operations |
||||||||
Gain (loss) from discontinued United Kingdom operations |
(30 | ) | 137 | |||||
(Credit) provision for income taxes |
| (72 | ) | |||||
Gain (loss) from discontinued operations |
(30 | ) | 209 | |||||
Net income |
$ | 170,077 | $ | 146,255 | ||||
Net income per share: |
||||||||
Basic |
$ | 5.79 | $ | 4.78 | ||||
Diluted |
$ | 5.67 | $ | 4.62 | ||||
Weighted average shares outstanding: |
||||||||
Basic |
29,393 | 30,590 | ||||||
Diluted |
29,985 | 31,669 | ||||||
Ratio of earnings to fixed charges |
6.27 | 7.98 |
4
As of | ||||
(In thousands, except per share data) | December 31, 2010 | |||
Balance Sheet Data: |
||||
Assets: |
||||
Cash and cash equivalents |
$ | 3,792 | ||
Restricted cash and cash equivalents |
66,536 | |||
Restricted securities available for sale |
805 | |||
Loans receivable (including $9,031 from affiliates as of December 31, 2010) |
1,344,881 | |||
Allowance for credit losses |
(126,868 | ) | ||
Loans receivable, net |
1,218,013 | |||
Property and equipment, net |
16,311 | |||
Income taxes receivable |
12,002 | |||
Other assets |
26,056 | |||
Total assets |
$ | 1,343,515 | ||
Liabilities and Shareholders Equity: |
||||
Liabilities: |
||||
Accounts payable and accrued liabilities |
$ | 75,297 | ||
Line of credit |
136,700 | |||
Secured financing |
300,100 | |||
Mortgage note |
4,523 | |||
Senior notes |
244,344 | |||
Deferred income taxes, net |
108,077 | |||
Total liabilities |
869,041 | |||
Shareholders Equity: |
||||
Common stock |
273 | |||
Paid-in capital |
30,985 | |||
Retained earnings |
443,326 | |||
Accumulated other comprehensive loss, net of tax of $64 as of December 31, 2010 |
(110 | ) | ||
Total shareholders equity |
474,474 | |||
Total liabilities and shareholders equity |
$ | 1,343,515 | ||
Book Value per share |
17.4 |
5
For the Year Ended December 31, 2010 | ||||||||||||
Pro Forma | ||||||||||||
(In thousands, except ratios and per share data) | As Reported | Adjustments | Pro Forma | |||||||||
(Unaudited) | ||||||||||||
Revenue: |
||||||||||||
Finance charges |
$ | 388,050 | $ | | $ | 388,050 | ||||||
Premiums earned |
32,659 | | 32,659 | |||||||||
Other income |
21,426 | | 21,426 | |||||||||
Total revenue |
442,135 | | 442,135 | |||||||||
Costs and expenses: |
||||||||||||
Salaries and wages |
61,327 | | 61,327 | |||||||||
General and administrative |
26,432 | | 26,432 | |||||||||
Sales and marketing |
19,661 | | 19,661 | |||||||||
Provision for credit losses |
10,037 | | 10,037 | |||||||||
Interest |
47,752 | 10,474 | (a) | 58,226 | ||||||||
Provision for claims |
23,429 | | 23,429 | |||||||||
Total costs and expenses |
188,638 | 10,474 | 199,112 | |||||||||
Income from continuing operations before provision for
income taxes |
253,497 | (10,474 | ) | 243,023 | ||||||||
Provision for income taxes |
83,390 | (3,446 | )(b) | 79,944 | ||||||||
Income from continuing operations |
170,107 | (7,028 | ) | 163,079 | ||||||||
Discontinued operations |
||||||||||||
Loss from discontinued United Kingdom operations |
(30 | ) | | (30 | ) | |||||||
Credit for income taxes |
| | | |||||||||
Loss from discontinued operations |
(30 | ) | | (30 | ) | |||||||
Net income |
$ | 170,077 | $ | (7,028 | ) | $ | 163,049 | |||||
Net income per share: |
||||||||||||
Basic |
$ | 5.79 | $ | 5.93 | ||||||||
Diluted |
$ | 5.67 | $ | 5.81 | ||||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
29,393 | (1,905 | )(c) | 27,488 | ||||||||
Diluted |
29,985 | (1,905 | )(c) | 28,080 | ||||||||
Other data: |
||||||||||||
Ratio of earnings to fixed charges |
6.27 | | 5.15 |
(a) | Reflects the additional interest expense and debt cost amortization associated with an assumed amount of Debt Financing and additional borrowings under our revolving secured line of credit facility. The assumed interest rate for the Debt Financing is a rate consistent with market rates for comparable debt instruments. Each 50 basis point increase or decrease in the yield on the Debt Financing will result in an annual $0.5 million increase or decrease, respectively, in interest expense. | |
(b) | Reflects the tax benefit associated with the pro forma adjustments at an effective rate of 32.9%. | |
(c) | Reflects the purchase of approximately 1.9 million shares at $65.625 per share. |
6
As of December 31, 2010 | ||||||||||||
Pro Forma | ||||||||||||
(In thousands, except per share data) | As Reported | Adjustments | Pro Forma | |||||||||
Assets: |
||||||||||||
Cash and cash equivalents |
$ | 3,792 | $ | | $ | 3,792 | ||||||
Restricted cash and cash equivalents |
66,536 | | 66,536 | |||||||||
Restricted securities available for sale |
805 | | 805 | |||||||||
Loans receivable (including $9,031 from
affiliates as of December 31, 2010) |
1,344,881 | | 1,344,881 | |||||||||
Allowance for credit losses |
(126,868 | ) | | (126,868 | ) | |||||||
Loans receivable, net |
1,218,013 | | 1,218,013 | |||||||||
Property and equipment, net |
16,311 | | 16,311 | |||||||||
Income taxes receivable |
12,002 | | 12,002 | |||||||||
Other assets |
26,056 | 3,000 | (a) | 29,056 | ||||||||
Total assets |
$ | 1,343,515 | $ | 3,000 | $ | 1,346,515 | ||||||
Liabilities and Shareholders Equity: |
||||||||||||
Liabilities: |
||||||||||||
Accounts payable and accrued liabilities |
$ | 75,297 | $ | | $ | 75,297 | ||||||
Line of credit |
136,700 | 28,300 | 165,000 | |||||||||
Secured financing |
300,100 | | 300,100 | |||||||||
Mortgage note |
4,523 | | 4,523 | |||||||||
New Debt Financing |
| 100,000 | (b) | 100,000 | ||||||||
Senior notes |
244,344 | (c) | | 244,344 | ||||||||
Deferred income taxes, net |
108,077 | | 108,077 | |||||||||
Total liabilities |
869,041 | 128,300 | 997,341 | |||||||||
Shareholders Equity: |
||||||||||||
Common stock |
273 | (19 | ) | 254 | ||||||||
Paid-in capital |
30,985 | | 30,985 | |||||||||
Retained earnings |
443,326 | (125,281 | )(d) | 318,045 | ||||||||
Accumulated other comprehensive loss, net
of tax of $64 at December 31, 2010 |
(110 | ) | | (110 | ) | |||||||
Total shareholders equity |
474,474 | (125,300 | ) | 349,174 | ||||||||
Total liabilities and shareholders equity |
$ | 1,343,515 | $ | 3,000 | $ | 1,346,515 | ||||||
Book Value per share |
17.4 | 13.7 |
(a) | Reflects the addition of $3.0 million in Debt Financing issuance costs. | |
(b) | Reflects $100.0 million in Debt Financing. | |
(c) | Represents $250.0 million aggregate principal amount of existing notes, net of unamortized debt discount. | |
(d) | Reflects the purchase of approximately 1.9 million shares at $65.625 per share and $0.3 million of related fees and expenses. |
3. | The bullets in the Certain Information Concerning CA Incorporation By Reference section of the Offer to Purchase on page 32 thereof are amended and restated as follows: |
| Annual Report on Form 10-K for the fiscal year ended December 31, 2010, filed with the Commission on February 24, 2011; | ||
| Definitive Proxy Statement on Form 14A, filed with the Commission on April 8, 2010; and | ||
| Current Report on Form 8-K, filed with the Commission on February 9, 2011. |
7
CREDIT ACCEPTANCE CORPORATION |
||||
By: | /s/ Douglas W. Busk | |||
Name: | Douglas W. Busk | |||
Title: | Senior Vice President and Treasurer | |||
8
EXHIBIT | ||
NUMBER | DESCRIPTION | |
(a)(1)(i)
|
Offer to Purchase.* | |
(a)(1)(ii)
|
Letter of Transmittal.* | |
(a)(5)(i)
|
Notice of Guaranteed Delivery.* | |
(a)(5)(ii)
|
Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* | |
(a)(5)(iii)
|
Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* | |
(a)(5)(iv)
|
Letter to Participants in the Credit Acceptance 401(k) Profit Sharing Plan and Trust.* | |
(a)(5)(v)
|
Press release dated February 9, 2011 announcing the commencement of the offer (incorporated by reference to CAs Form 8-K dated February 9, 2011). | |
(b)(i)
|
Fourth Amended and Restated Credit Agreement, dated as of February 7, 2006, among CA, the Lenders which are parties thereto from time to time, Comerica Bank as administrative agent and Banc of America Securities LLC as sole lead arranger and sole bank manager (incorporated by reference to CAs Form 8-K dated February 10, 2006). | |
(b)(ii)
|
Amendment No. 1, dated September 20, 2006, to the Fourth Amended and Restated Credit Agreement as of February 7, 2006, among CA, the Lenders which are parties thereto from time to time and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated June 19, 2007). | |
(b)(iii)
|
Amendment No. 2, dated January 19, 2007, to the Fourth Amended and Restated Credit Agreement as of February 7, 2006, among CA, the Lenders which are parties thereto from time to time and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated June 19, 2007). | |
(b)(iv)
|
Amendment No. 3, dated June 14, 2007, to the Fourth Amended and Restated Credit Agreement as of February 7, 2006, among CA, the Lenders which are parties thereto from time to time and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated June 19, 2007). | |
(b)(v)
|
Amendment No. 4, dated January 25, 2008, to the Fourth Amended and Restated Credit Agreement as of February 7, 2006, among CA, the Lenders which are parties thereto from time to time and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated January 31, 2008). | |
(b)(vi)
|
Fifth Amendment, dated as of July 31, 2008, to the Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 10-Q for the quarterly period ended September 30, 2008). | |
(b)(vii)
|
Sixth Amendment, dated as of December 9, 2008, to the Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 10-K for the year ended December 31, 2008). | |
(b)(viii)
|
Seventh Amendment, dated as of June 15, 2009, to Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated June 18, 2009). | |
(b)(ix)
|
Eighth Amendment, dated as of October 20, 2009, to the Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 10-K for the year ended December 31, 2009). | |
(b)(x)
|
Ninth Amendment, dated as of February 1, 2010, to the Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated February 5, 2010). | |
(b)(xi)
|
Tenth Amendment, dated as of June 9, 2010, to the Fourth Amended and Restated Credit Agreement, dated February 7, 2006, among CA, the Lenders which are parties thereto from time to time, and Comerica Bank as administrative agent (incorporated by reference to CAs Form 8-K dated June 9, 2010). |
9
EXHIBIT | ||
NUMBER | DESCRIPTION | |
(d)(1)
|
Credit Acceptance Corporation Amended and Restated Incentive Compensation Plan, as amended, April 6, 2009 (incorporated by reference to Annex A to CAs Definitive Proxy Statement on Schedule 14A dated April 10, 2009). | |
(d)(2)
|
Credit Acceptance Corporation 1992 Stock Option Plan, as amended and restated May 1999 (incorporated by reference to CAs Form 10-Q for the quarterly period ended June 30, 1999). | |
(d)(3)
|
Credit Acceptance Corporation Director Stock Option Plan (incorporated by reference to CAs Form 10-K for the year ended December 31, 2001). |
* | Previously filed. |
10