Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No.  )¹

Donnelley Financial Solutions, Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

25787G100

(CUSIP Number)

JEFFREY Jacobowitz

SIMCOE CAPITAL MANAGEMENT, LLC

509 Madison Avenue, Suite 2200

New York, New York 10022

(212) 448-7400

 

STEVE WOLOSKY, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

 

November 15, 2018

(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.

 

 

1              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).

	1		NAME OF REPORTING PERSON
				SIMCOE CAPITAL MANAGEMENT, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							2,000,000
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							2,000,000
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				2,000,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.9%
	14		TYPE OF REPORTING PERSON
				OO

  

	1		NAME OF REPORTING PERSON
				SIMCOE PARTNERS, L.P.
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				WC
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,886,022
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,886,022
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,886,022
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.5%
	14		TYPE OF REPORTING PERSON
				PN

  

 

	1		NAME OF REPORTING PERSON
				SIMCOE MANAGEMENT COMPANY, LLC
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				DELAWARE
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							1,886,022
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							1,886,022
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				1,886,022
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.5%
	14		TYPE OF REPORTING PERSON
				OO

  

 

1

NAME OF REPORTING PERSON

SDR PARTNERS, LLC

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☐

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

WC

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

DELAWARE

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

113,978

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

- 0 -

PERSON WITH

9

SOLE DISPOSITIVE POWER

113,978

10

SHARED DISPOSITIVE POWER

- 0 -

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

113,978

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Less than 1%

14

TYPE OF REPORTING PERSON

OO

  

 

	1		NAME OF REPORTING PERSON
				JEFFREY JACOBOWITZ
	2		CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP															(a) ☐
																		(b) ☐
	3		SEC USE ONLY
	4		SOURCE OF FUNDS
				AF
	5		CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)															☐
	6		CITIZENSHIP OR PLACE OF ORGANIZATION
				USA
NUMBER OF				7		SOLE VOTING POWER
SHARES
BENEFICIALLY							2,000,000
OWNED BY				8		SHARED VOTING POWER
EACH
REPORTING							- 0 -
PERSON WITH				9		SOLE DISPOSITIVE POWER
							2,000,000
				10		SHARED DISPOSITIVE POWER
							- 0 -
	11		AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
				2,000,000
	12		CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES															☐
	13		PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
				5.9%
	14		TYPE OF REPORTING PERSON
				IN

  

The following constitutes the Schedule 13D filed by the undersigned (the “Schedule 13D”).

Item 1.

Security and Issuer.

This statement relates to the common stock, par value $0.01 per share (the “Shares”), of Donnelley Financial Solutions, Inc., a Delaware corporation (the “Issuer”). The address of the principal executive offices of the Issuer is 35 West Wacker Drive, Chicago, Illinois 60601.

Item 2.

Identity and Background.

(a)       This statement is filed by:

(i)

Simcoe Partners, L.P., a Delaware limited partnership (“Simcoe Partners”);

(ii)

Simcoe Management Company, LLC, a Delaware limited liability company (“Simcoe Management”), which serves as the general partner of Simcoe Partners;

(iii)

SDR Partners, LLC, a Delaware limited liability company (“SDR Partners”);

(iv)

Simcoe Capital Management, LLC, a Delaware limited liability company (“Simcoe Capital”), which serves as the investment manager to each of Simcoe Partners and SDR Partners; and

(v)

Jeffrey Jacobowitz, who serves as the Managing Member of each of Simcoe Management and Simcoe Capital.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing Agreement, as further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

(b)       The address of the principal office of each of the Reporting Persons is 509 Madison Avenue, Suite 2200, New York, New York 10022.

(c)       The principal business of each of Simcoe Partners and SDR Partners is investing in securities. The principal business of Simcoe Management is serving as the general partner of Simcoe Partners. The principal business of Simcoe Capital is serving as the investment manager to each of Simcoe Partners and SDR Partners. Mr. Jacobowitz is the Managing Member of each of Simcoe Management and Simcoe Capital.

(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 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.

(f)       Mr. Jacobowitz is a citizen of the United States of America.

Item 3.

Source and Amount of Funds or Other Consideration.

The Shares purchased by each of Simcoe Partners and SDR Partners were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market purchases. The aggregate purchase price of the 1,886,022 Shares directly owned by Simcoe Partners is approximately $33,606,435, including brokerage commissions. The aggregate purchase price of the 113,978 Shares directly owned by SDR Partners is approximately $1,964,705, including brokerage commissions.

Item 4.

Purpose of Transaction.

The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were and continue to be substantially undervalued, particularly when considering the Issuer’s growing software as a service (SaaS) revenue streams and strong, consistent free cash flow generation. The Reporting Persons are supportive of the Issuer’s management team as well as the operating performance of the Issuer and are pleased with the five-year projected forecast laid out at the Issuer’s May 2018 investor day, where free cash flow was projected to grow at a 13% CAGR through 2022 – cumulatively well in excess of $300 million (approximately $10 per share).

 

The Reporting Persons are nevertheless concerned about:

 

•

the -28% total shareholder return generated since the Issuer’s spin-off from R.R. Donnelley & Sons Company in October 2016 versus the Russell 2000 at +21%;

•

the exceedingly discounted valuation at which the Issuer trades (EV/2018e EBITDA of 5.2x – adjusted for expected year end cash balance);

•

the absence of a shareholder capital return program;

•

the ongoing perception by many investors that the Issuer is a print oriented company; and

•

the intended utilization of in excess of $300 million in cumulative free cash expected to be generated through 2022.

 

No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein or such as would occur upon or in connection with completion of, or following, any of the actions discussed herein.  The Reporting Persons intend to review their investment in the Issuer on a continuing basis.  The Reporting Persons have engaged and look forward to continuing to engage constructively in communications with management and the Board of Directors of the Issuer (the “Board”) regarding adding Mr. Jacobowitz as an independent shareholder representative to the Board.  Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, continuing to engage in communications with management and the Board, engaging in discussions with shareholders of the Issuer or other third parties about the Issuer and the Reporting Persons’ investment, making recommendations or proposals to the Issuer concerning changes to the capitalization, ownership structure, board structure, potential business combinations or dispositions involving the Issuer or certain of its businesses, or suggestions for improving the Issuer’s financial and/or operational performance, purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares, including swaps and other derivative instruments, or changing their intention with respect to any and all matters referred to in Item 4.

 

Item 5.

Interest in Securities of the Issuer.

The aggregate percentage of Shares reported owned by each person named herein is based upon 34,100,000 Shares outstanding, as of November 2, 2018, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2018.

A.

Simcoe Partners

(a)

As of the date hereof, Simcoe Partners directly owned 1,886,022 Shares.

Percentage: Approximately 5.5%

(b)

1. Sole power to vote or direct vote: 1,886,022 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,886,022 4. Shared power to dispose or direct the disposition: 0

 

(c)

The transactions in the Shares by Simcoe Partners during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

B.

Simcoe Management

(a)

Simcoe Management, as the general partner of Simcoe Partners, may be deemed the beneficial owner of the 1,886,022 Shares owned by Simcoe Partners.

Percentage: Approximately 5.5%

(b)

1. Sole power to vote or direct vote: 1,886,022 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 1,886,022

4. Shared power to dispose or direct the disposition: 0

 

(c)

Simcoe Management has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of Simcoe Partners during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

C.

SDR Partners

(a)

As of the date hereof, SDR Partners directly owned 113,978 Shares.

Percentage: Less than 1%

(b)

1. Sole power to vote or direct vote: 113,978 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 113,978 4. Shared power to dispose or direct the disposition: 0

 

(c)

The transactions in the Shares by SDR Partners during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

D.

Simcoe Capital

(a)

Simcoe Capital, as the investment manager to each of Simcoe Partners and SDR Partners, may be deemed the beneficial owner of the (i) 1,886,022 Shares owned by Simcoe Partners and (ii) 113,978 Shares owned by SDR Partners.

Percentage: Approximately 5.9%

(b)

1. Sole power to vote or direct vote: 2,000,000 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 2,000,000

4. Shared power to dispose or direct the disposition: 0

 

(c)

Simcoe Capital has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of each of Simcoe Partners and SDR Partners during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

E.

Mr. Jacobowitz

(a)

Mr. Jacobowitz, as Managing Member of each of Simcoe Management and Simcoe Capital, may be deemed the beneficial owner of the (i) 1,886,022 Shares owned by Simcoe Partners and (ii) 113,978 Shares owned by SDR Partners.

Percentage: Approximately 5.9%

(b)

1. Sole power to vote or direct vote: 2,000,000 2. Shared power to vote or direct vote: 0 3. Sole power to dispose or direct the disposition: 2,000,000

4. Shared power to dispose or direct the disposition: 0

 

(c)

Mr. Jacobowitz has not entered into any transactions in the Shares during the past sixty days. The transactions in the Shares on behalf of each of Simcoe Partners and SDR Partners during the past sixty days are set forth in Schedule A and are incorporated herein by reference.

Each Reporting Person, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons.  Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

(d)

No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Shares.

(e)

Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On November 26, 2018, the Reporting Persons entered into a Joint Filing Agreement in which, among other things, the Reporting Persons agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer. The Joint Filing Agreement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 7.

Material to be Filed as Exhibits.

99.1

Joint Filing Agreement by and among Simcoe Partners, L.P., SDR Partners, LLC, Simcoe Management Company, LLC, Simcoe Capital Management, LLC and Jeffrey Jacobowitz, dated November 26, 2018.

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: November 26, 2018 

	Simcoe Partners, L.P.
	By:	Simcoe Management Company, LLC General Partner
	By:	/s/ Jeffrey Jacobowitz
		Name:	Jeffrey Jacobowitz
		Title:	Managing Member

 

	Simcoe Management Company, LLC
	By:	/s/ Jeffrey Jacobowitz
		Name:	Jeffrey Jacobowitz
		Title:	Managing Member

 

	SDR Partners, LLC
	By:	Simcoe Capital Management, LLC Investment Manager
	By:	/s/ Jeffrey Jacobowitz
		Name:	Jeffrey Jacobowitz
		Title:	Managing Member

 

	Simcoe Capital Management, LLC
	By:	/s/ Jeffrey Jacobowitz
		Name:	Jeffrey Jacobowitz
		Title:	Managing Member

 

	/s/ Jeffrey Jacobowitz
	Jeffrey Jacobowitz

 

SCHEDULE A

 

Transactions in the Shares During the Past Sixty Days

 

Shares of Common Stock Purchased

Price Per Share($)

Date of Purchase

 

Simcoe Partners, L.P.

 

33,410	16.4204	11/15/2018
37,132	16.8296	11/16/2018
53,245	16.4964	11/19/2018
31,289	16.1149	11/20/2018
41,445	16.2340	11/21/2018
19,853	16.5380	11/23/2018
73,199	16.6788	11/26/2018

 

SDR PArtners, LLC

 

4,290	16.4204	11/15/2018
4,768	16.8296	11/16/2018
6,837	16.4964	11/19/2018
5,749	16.1149	11/20/2018
2,176	16.2340	11/21/2018
500	16.5380	11/23/2018
1,842	16.6788	11/26/2018