SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
DELTA GALIL INDUSTRIES LTD.
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(Name of Issuer)
ORDINARY SHARES, PAR VALUE NIS 1 PER SHARE
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(Title of Class of Securities)
None
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(CUSIP Number)
Isaac Dabah
GMM Capital, LLC
689 Fifth Avenue, 14th Floor
New York, NY 10022
(212) 688-8288
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
With a copy to:
Thomas W. Greenberg, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
August 15, 2005
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(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), 240.13d-1(f) or
240.13d-1(g), check the following box. [ ]
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, as amended (the "Exchange Act") or otherwise subject to
the liabilities of that section of the Exchange Act but shall be subject to
all other provisions of the Exchange Act (however, see the Notes).
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1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only)
GMM Capital, LLC
I.R.S. Identification No.: 72-6232404
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. Source of Funds (See Instructions)
AF, BK
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e)
[ ]
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6. Citizenship or Place of Organization
Delaware
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Number of 7. Sole Voting Power
Shares
Beneficially 0
Owned by -----------------------------------
Each 8. Shared Voting Power
Reporting
Person with 4,750,588
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9. Sole Dispositive Power
0
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10. Shared Dispositive Power
4,750,588
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,750,588
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[ ]
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13. Percent of Class Represented by Amount in Row (11)
25.4%*
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14. Type of Reporting Person (See Instructions)
OO
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* Based on 18,695,165 ordinary shares outstanding, excluding 1,206,802
ordinary shares held by the Company and excluding 45,882 ordinary shares held
by a trustee in connection with Delta Galil's stock option plans.
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1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only)
GMM Trust
I.R.S. Identification No.: 72-6232404
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2. Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. Source of Funds (See Instructions)
OO
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or 2(e)
[ ]
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6. Citizenship or Place of Organization
New Jersey
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Number of 7. Sole Voting Power
Shares
Beneficially 0
Owned by ----------------------------------
Each 8. Shared Voting Power
Reporting
Person with 4,750,588
-----------------------------------
9. Sole Dispositive Power
0
-----------------------------------
10. Shared Dispositive Power
4,750,588
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
4,750,588
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[ ]
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13. Percent of Class Represented by Amount in Row (11)
25.4%**
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14. Type of Reporting Person (See Instructions)
OO
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** Based on 18,695,165 ordinary shares outstanding, excluding 1,206,802
ordinary shares held by the Company and excluding 45,882 ordinary shares held
by a trustee in connection with Delta Galil's stock option plans.
Item 1. Security and Issuer.
This statement on Schedule 13D (the "Statement") relates to the
ordinary shares, par value 1 NIS per share ("Ordinary Shares"), of Delta Galil
Industries Ltd., an Israeli corporation (the "Company"). The Company's
principal executive office is located at 2 Kaufman Street, Tel Aviv, Israel.
Item 2. Identity and Background.
(a) This Statement is being filed jointly on behalf of GMM Capital,
LLC ("GMM Capital"), a Delaware limited liability company and GMM Trust, a
trust formed under the laws of the State of New Jersey ("GMM Trust", and
together with GMM Capital, the "Reporting Persons"). GMM Trust is the sole
member of GMM Capital.
(b) The principal office of each of the Reporting Persons is located
at 689 Fifth Avenue, 14th Floor, New York, NY 10022. The names, business
addresses and present principal occupations or employment of the trustees of
GMM Trust are set forth on the attached Schedule I, which is incorporated
herein by reference.
(c) The principal business of GMM Capital is to invest in and trade
securities on behalf of the beneficiaries of GMM Trust. The principal business
of GMM Trust is to invest in and trade securities on behalf of the
beneficiaries of GMM Trust. The names and principal occupations or employment
of the directors and executive officers of GMM Capital and the trustees of GMM
Trust are set forth on the attached Schedule I, which is incorporated herein
by reference.
(d) None of the Reporting Persons has, during the last five years,
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors). None of the persons identified on Schedule I hereto
has, during the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Persons has, during the last five years,
been a party to any civil proceeding as a result of which it was 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. None of the persons
identified on Schedule I hereto has, during the last five years, been a party
to any civil proceeding as a result of which such person was 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.
(f) Except as noted on Schedule I, all directors and executive
officers of GMM Capital and the trustees of GMM Trust are citizens of the
United States.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Persons have entered into an agreement to acquire
4,256,537 Ordinary Shares (the "Purchased Shares") owned by Sara Lee
International Corporation ("Sara Lee") pursuant to the transactions more fully
described in Item 4 of this Statement for an aggregate purchase price of
$27,667,490.50 pursuant to a Share Purchase Agreement, dated as of August 15,
2005 (the "Share Purchase Agreement"), by and between GMM Capital and Sara
Lee. GMM Capital will fund the purchase price with capital provided by and on
behalf of GMM Trust and through loans obtained from one or more financial
institutions (which have not yet been identified). The Reporting Persons hold
an additional 494,051 Ordinary Shares which were acquired for cash through
open market purchases for an aggregate purchase price of $4,436,331.54,
including brokerage fees and commissions.
Item 4. Purpose of Transaction.
On August 15, 2005, GMM Capital entered into the Share Purchase
Agreement with Sara Lee pursuant to which GMM Capital has agreed to purchase
the Purchased Shares owned by Sara Lee for an aggregate purchase price of
$27,667,490.50, or $6.50 per share. The consummation of the transactions
contemplated by the Share Purchase Agreement is scheduled to take place on
August 30, 2005, subject to the satisfaction of certain conditions, including
but not limited to: (i) the representations and warranties in the Share
Purchase Agreement being true and correct as of the closing date under the
Share Purchase Agreement and (ii) the receipt of all applicable
authorizations, consents and approvals of governmental authorities.
Furthermore, if within six months of the date of acquiring the Purchased
Shares, GMM Capital acquires any Ordinary Shares from any of N.D.R.L.
Investments (1988) Ltd., Nichsei Adinoam, Noam Lautman or Dov Lautman
(collectively, the "Lautman Group") or makes a tender offer to purchase
Ordinary Shares at a purchase price higher than $6.50 per share, then, if such
transaction is consummated, GMM Capital has agreed to pay Sara Lee the product
of (i) the excess of such purchase price over $6.50 multiplied by (ii) the
number of Purchased Shares. A copy of the Share Purchase Agreement is attached
as Exhibit 1 and is incorporated by reference in its entirety herein.
Additionally, in connection with the transactions contemplated by the
Share Purchase Agreement, the Lautman Group has agreed to waive certain rights
of first refusal it has with respect to the Purchased Shares and to permit the
sale by Sara Lee of the Purchased Shares to GMM Capital.
GMM Capital has agreed to purchase the Purchased Securities because
the Reporting Persons believe that the Company represents an attractive
investment. Additionally, GMM Capital and Isaac Dabah have agreed to enter
into a shareholders agreement (the "Shareholders Agreement") with the Lautman
Group upon the consummation of the transactions contemplated by the Share
Purchase Agreement in order to regulate their relationship as shareholders of
the Company and govern their respective support for, and responsibilities
towards, the Company. A copy of the form of Shareholders Agreement is attached
as Exhibit 2 and is incorporated by reference in its entirety herein.
The Shareholders Agreement will provide, among other things, that:
(1) GMM Capital will be entitled to nominate 30% of the members
of the Company's board of directors, excluding outside directors, with
fractions rounded up to the next whole number, and the Lautman Group is
entitled to nominate the remainder of the members of the board, excluding
independent directors;
(2) at least one of the directors nominated by GMM Capital
shall be a member of the balance sheet committee of the board of directors of
the Company;
(3) the Company may not issue, allot or grant options over or
conversion rights into its unissued share capital without the prior consent of
GMM Capital or unless as part of a pro rata distribution of fully paid up
bonus shares;
(4) new appointments of a chief executive officer of the
Company shall require the consent of GMM Capital;
(5) the prior approval of GMM Capital and the Lautman Group
shall be required for actions by the Company or its subsidiaries with respect
to (i) acquisitions, dispositions or licenses of assets or businesses, other
than in the ordinary course of business consistent with past practice,
involving consideration with a value of more than 5% of the total assets of
the Company, (ii) public issuances or private placements of bonds or similar
debt securities or the payment of dividends in any fiscal year in excess of 5%
of the total consolidated assets of the Company, (iii) the approval of the
annual capital expenditure budget of the Company and any material modification
thereof, if the aggregate amount contemplated by such capital expenditure
budget to be spent exceeds certain pre-defined thresholds and (iv) any merger,
consolidation, recapitalization or equivalent transaction involving the
Company (other than certain intercompany transactions) or the commencement of
any bankruptcy or insolvency proceedings or liquidation or winding up of the
Company; and
(6) the approval of the annual operating budget of the Company
and any material modification thereof shall require the approval of a majority
of the board of directors of the Company.
In addition, the Lautman Group and GMM Capital shall each grant the
other a right to purchase any Ordinary Shares that the other party
beneficially owns and proposes to sell, other than to certain permitted
transferees of each party, including controlled and controlling affiliates and
family members. Isaac Dabah, the Executive Director of GMM Capital, has
personally guaranteed the obligations of GMM Capital under the Shareholders
Agreement.
The term of the shareholders agreement will expire on the earlier to
occur of: (i) the date on which GMM Capital and its permitted transferees hold
less than 10% of the equity rights of the Company and (ii) the date on which
the Lautman Group hold less than 10% of the equity rights of the Company,
provided that GMM then owns at least 2.5 times the number of shares held by
the Lautman Group. The Reporting Persons disclaim beneficial ownership of the
Ordinary Shares owned by the Lautman Group.
The parties have also agreed that Isaac Dabah will have the title of
non executive Deputy Chairman of the Board of Directors of the Company.
Other than as set forth above, the Reporting Persons have no present
plans or intentions which would result in or relate to any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D of the
Securities Exchange Act of 1934, as amended. However, the Reporting Persons
may, at any time and from time to time, review or reconsider their position
with respect to the Company, and formulate (and modify) plans or proposals
with respect to any such matters. The Reporting Persons intend to continue to
review and evaluate their investment in the Company. Depending on the price
and availability of funds, subsequent developments affecting the Company, the
Company's business, other investment and business opportunities available to
the Reporting Persons and general stock market, economic and other factors
that the Reporting Persons may deem relevant from time to time, the Reporting
Persons may maintain their investment at current levels or sell all or a part
of their investment, or acquire additional Ordinary Shares or other securities
of Company at any time. Any acquisition or disposition of Ordinary Shares by
the Reporting Persons may be effected through open market or privately
negotiated transactions, or otherwise.
Item 5. Interest in Securities of the Issuer.
(a) Based upon information set forth in the Company's Report on Form
20-F for the period ending December 31, 2004, there were 19,947,849 Ordinary
Shares outstanding as of December 31, 2004, 1,206,802 of which were held by
the Company as treasury shares and 45,882 of which were held by a trustee in
connection with the Company's stock option plans. The Reporting Persons may be
deemed to beneficially own 4,750,588 Ordinary Shares, or 25.4% of the
outstanding Ordinary Shares. The persons set forth on Schedule I do not
beneficially own any Ordinary Shares and expressly disclaim beneficial
ownership of the Ordinary Shares deemed beneficially owned by the Reporting
Persons.
(b) The Reporting Persons share the power to vote or to direct to
vote and the share the power to dispose or to direct the disposition of all
4,750,588 Ordinary Shares that may be deemed beneficially owned by them. As a
result of its ownership of GMM Capital, GMM Trust may be deemed to control the
power to vote or direct the disposition of such Ordinary Shares. The persons
set forth on Schedule I do not have the power to vote or to direct to vote or
the power to dispose or to direct the disposition of any other Ordinary Shares
and expressly disclaim beneficial ownership of the Ordinary Shares deemed
beneficially owned by the Reporting Persons.
(c) Except for the transactions described in Item 4 of this
Statement, during the past sixty days, there were no purchases of Ordinary
Shares, or securities convertible in to or exchangeable for Ordinary Shares,
by the Reporting Persons or any person or entity controlled by the Reporting
Persons or any person or entity for which the Reporting Persons possess voting
control over the securities thereof or, to the knowledge of the Reporting
Persons, the persons listed on Schedule I. During such sixty day period, there
were no sales of Ordinary Shares, or securities convertible into or
exchangeable for Ordinary Shares, by the Reporting Persons or any person or
entity controlled by the Reporting Persons or any person or entity for which
the Reporting Persons possess voting control over the securities thereof or,
to the knowledge of the Reporting Persons, the persons listed on Schedule I.
(d) No person (other than the Reporting Persons) is known by the
Reporting Persons to have the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the Ordinary
Shares referenced in this Statement.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Except as described herein and in Item 4 of this Statement, there are
no contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons and any person, with respect to any
securities of the Company, including, but not limited to, transfer or voting
of any of the securities of the Company, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss or the giving or withholding of proxies.
Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the
Reporting Persons have entered into an agreement with respect to the joint
filing of this statement, and any amendment or amendments hereto, which is
attached as Exhibit 3 and is incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
1. Share Purchase Agreement, dated as of August 15, 2005 by and
between GMM Capital and Sara Lee.
2. Form of Shareholders Agreement to be entered into by and among GMM
Capital, Isaac Dabah and the Lautman Group.
3. Joint Filing Agreement, dated as of August 16, 2005, by and
between the Reporting Persons.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth herein is true, complete and correct.
GMM CAPITAL LLC
By: /s/ Isaac Dabah
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Name: Isaac Dabah
Title: Executive Director
GMM TRUST
By: /s/ Isaac Dabah
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Name: Isaac Dabah
Title: Trustee
Dated: August 16, 2005
Schedule I
OFFICERS AND DIRECTORS OF GMM CAPITAL AND TRUSTEES OF GMM TRUST
The names, present principal occupations and business addresses of
the officers and directors of GMM Capital and the trustees of GMM Trust are
set forth below. Except as set forth below, such individual's business address
is that of GMM Capital or GMM Trust, as applicable. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
such person's position with GMM Capital or GMM Trust, as applicable.
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Name Principal Occupation Business Address
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Isaac Dabah, Executive Director Private investor 689 Fifth Avenue, 14th Floor
of GMM Capital and Trustee of GMM Trust New York, NY 10022
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Ivette Dabah, Trustee of GMM Trust* Private investor 689 Fifth Avenue, 14th Floor
New York, NY 10022
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Donald Hecht, Manager of GMM Capital and Certified Public Accountant 689 Fifth Avenue, 14th Floor
Administrative Trustee of GMM Trust New York, NY 10022
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Itzhak Weinstock, Chief Financial Officer Chief Financial Officer of GMM 689 Fifth Avenue, 14th Floor
of GMM Capital Capital New York, NY 10022
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* Ivette Dabah is a citizen of Argentina.
EXHIBIT INDEX
1. Share Purchase Agreement, dated as of August 15, 2005 by and
between GMM Capital and Sara Lee.
2. Form of Shareholders Agreement to be entered into by and among GMM
Capital, Isaac Dabah and the Lautman Group.
3. Joint Filing Agreement, dated as of August 16, 2005, by and
between the Reporting Persons.