Issues Letter Recommending Stockholders NOT
Take Any Action on Accuride’s Proxy Materials
Stockholders Will Soon Receive Coliseum’s Proxy
Materials and Should Vote the GOLD Proxy Card to Protect the Value
of Their Investment
Crestview Offer Significantly Undervalues
Accuride and is Not in Best Interests of Stockholders
Coliseum Capital Management (“Coliseum”), the largest
stockholder of Accuride Corporation (NYSE:ACW), with an ownership
of approximately 19% of Accuride’s outstanding shares, today
announced that it has issued an open letter to Accuride
stockholders urging them to take no action in response to
Accuride’s proxy materials related to a vote on the merger proposed
by Crestview Partners.
Coliseum has filed its own proxy materials with the Securities
and Exchange Commission and will soon be sending these materials to
stockholders. Coliseum urges stockholders to vote the GOLD proxy
card AGAINST all of the proposals at the upcoming Special Meeting
of Stockholders.
The full text of the letter can be found below.
AN IMPORTANT MESSAGE FROM COLISEUM TO THE
STOCKHOLDERS OF ACCURIDE CORPORATION
Urges its Fellow Stockholders to Look for
Coliseum’s GOLD Proxy Card Before Voting
Dear Fellow Stockholder of Accuride Corporation:
Although the Special Meeting to vote on the proposed merger of
Accuride with affiliates of Crestview Advisors, LLC (“Crestview”)
for $2.58 per share is not until November 15, 2016, you may have
already received a proxy statement and white proxy card from
Accuride.
COLISEUM STRONGLY URGES YOU NOT TO RETURN
THE WHITE PROXY CARD OR VOTING INSTRUCTION FORM FROM ACCURIDE AND
NOT TO ALLOW ACCURIDE TO TAKE YOUR VOTE OVER THE TELEPHONE
Coliseum urges you to wait until you have received Coliseum’s
proxy statement and GOLD proxy card before voting. Coliseum
will soon be sending out our own definitive proxy materials and a
GOLD proxy card with respect to the Special Meeting. If you
have already voted the Company’s white proxy card or voting
instruction form or had your vote taken over the telephone, a
later-dated GOLD card will revoke your previously cast
vote.
As the largest holder of common stock of Accuride Corporation,
owning 19% of the outstanding shares, Coliseum is writing this
letter to express our strong opposition to the proposed sale of
Accuride to Crestview. We believe this proposed merger materially
undervalues the Company, is the wrong strategic choice for Accuride
and is not in the best interests of stockholders. We will be voting AGAINST the proposed
merger.
Coliseum is a long-term, fundamental investor with more than $1
billion in assets under management. We are a patient, collaborative
investor that focuses on working supportively with management teams
and boards. Since Coliseum’s inception more than 10 years ago, the
co-founding partners, Christopher Shackelton and Adam Gray, have
sat on the boards of thirteen public companies. We are proud of the
partnerships we have built, and appreciate opportunities to work
closely with management teams to create value for all stockholders.
In Coliseum’s history, this is the first time we have publicly
opposed a proposed merger.
We have a long track record as a supportive stockholder of
Accuride. We have closely monitored the Company since 2007, and
have been one of Accuride’s largest stockholders since 2012. We
have developed a strong relationship with management, and credit
Rick Dauch and his team with driving significant intrinsic value
over the past five and a half years.
Our view of value and the merits of this proposed merger are
based on many years of industry and Accuride-specific research. We
have toured facilities, spent time with multiple layers of
management and forged relationships with customers and competitors.
We have confidence in the Company’s strategic plan, talented and
committed workforce, valuable operating assets, durable brand and
advantageous competitive position.
Our views also reflect our most recent meeting, on October 21,
2016, with representatives of the Company and its financial
advisor, which did not change Coliseum’s fundamental view of
Accuride’s long-term value or our conviction that the proposed
merger is not in the best interests of all Accuride
stockholders.
We believe that now is the wrong time
to sell Accuride. The Company has made substantial
investments over the past five and a half years, spending over $150
million to upgrade manufacturing facilities and successfully
restore its customer relationships. We believe that the truck
market is at a cyclical low, but when the cycle turns Accuride will
be well-positioned to harvest the benefits of its hard work and
investment. Stockholders who patiently supported these investments
should participate in the upside.
We believe that Accuride’s prospects as
an independent company are strong. The Company’s own
projections (disclosed in the Accuride proxy statement) forecast
2018 Adjusted EBITDA (as defined in the Accuride proxy statement)
of $98 million. Using Accuride’s blended Total Enterprise Value
multiple which we believe to be 5.5x (as we calculated from the
fairness analysis of its financial advisor contained in the
Accuride proxy statement) implies a potential valuation of $5.00
per share, which equates to a potential 94% return over the next
two years. The valuation discrepancy is even more pronounced in
2020 when the Company forecasts Adjusted EBITDA of $134 million,
which implies a significantly higher share price. Furthermore,
Accuride’s projections do not incorporate any material deleveraging
or additional value contributed from high return on investment
projects such as, adding aluminum wheels capacity in Europe,
optimizing the current manufacturing footprint, or accretive
acquisitions, which could further enhance returns – benefits that
would be captured by Crestview as a result of the proposed
merger.
Less than 18 months ago, Accuride’s
common stock was trading near $5.00 per share and the Company
received third party acquisition proposals at prices above $5.00
per share. Because our founders have sat in many
boardrooms, Coliseum understands the difficult decisions that
boards are faced with at challenging times. But we believe that a
sale of Accuride at a cyclical low is the wrong strategic choice,
and we strongly recommend pursuing another course. Rather than
allowing Crestview to capture the value resulting from the truck
market normalizing, this value should accrue to the benefit of the
Company’s existing stockholders.
We believe Accuride’s senior notes can
be refinanced and doing so will immediately result in a materially
higher share price. We have had discussions with
multiple investment banks regarding the feasibility of refinancing
the Company’s senior notes, and we have confidence that the senior
notes can be refinanced.
We believe a sale of the Company is the
wrong strategic choice for Accuride stockholders.
Instead of selling Accuride at what we believe is a steep discount
to its fundamental value, current stockholders should have the
opportunity to support Accuride in responsibly managing its debt
maturities and strategically positioning itself to create
significant stockholder value.
Specifically, we believe Accuride should consider a modest
capital raise from current stockholders in order to facilitate
refinancing its senior notes, as well as pursue high return on
investment projects and growth initiatives through strategic
acquisitions. Coliseum is prepared to provide support by
participating in a capital raise and is committed to pursuing a
transaction that is fair and equitable to all Accuride stockholders
and allows them the opportunity to share in the significant upside
that we believe can be realized from their investment in the
Company.
The choice for Accuride stockholders is
clear. Accuride stockholders can sell now and receive
$2.58 per share, a substantial discount to historic trading prices
of the Accuride common stock and to takeover proposals received by
Accuride only 18 months ago. Alternatively, Accuride stockholders
can reject the proposed merger and, when the market cycle turns,
benefit from the significant recovery in Accuride’s business that
is reflected in Accuride’s own projections, which imply potential
future values of $5.00 per share of Accuride common stock, or
potentially even higher values.
We feel compelled to take this uncharacteristic step and oppose
this proposed merger in view of the considerable value that
Accuride stockholders are being asked to sacrifice.
We believe our fellow
stockholders should vote AGAINST this proposed
merger
You will be able to vote AGAINST the Crestview merger proposal
on our GOLD proxy card. We urge you to WAIT for and read
Coliseum’s proxy solicitation materials before you vote or return a
proxy.
If you have already voted for the Crestview merger proposal, you
have every right to change your vote by signing, dating and
returning a later dated GOLD proxy card or by voting in
person at the Special Meeting.
We look forward to sharing with you in more detail in the coming
weeks our views AGAINST the Crestview merger proposal.
Why are You Seeking my Vote AGAINST the Crestview Merger
Proposal?
We are seeking your vote AGAINST the Crestview merger proposal
because we believe the Crestview merger proposal significantly
undervalues the Company. We believe that the proposed sale of
Accuride is the wrong transaction, at
the wrong time, for the wrong reasons and at the wrong price.
When is the Special Meeting?
The date of the Special Meeting is November 15, 2016, but
Accuride has announced that it has mailed proxy solicitation
materials to the Company’s stockholders and Accuride may also
already be seeking to solicit stockholder votes by telephone,
before stockholders have had an opportunity to review the Coliseum
proxy materials.
What Should I Do Now?
We recommend that you do NOT return any white proxy card or
voting instruction form to Accuride and do NOT allow Accuride to
take your vote over the telephone. If you have already voted a
white proxy card or voting instruction form or had your vote
recorded over the telephone, returning a later dated GOLD
proxy card or GOLD voting instruction form will revoke your
previously cast vote.
Who Should I Contact for More Information?
Your vote is important. Coliseum’s proxy solicitor is Okapi
Partners LLC. If you have any questions or need further assistance
with your vote, please contact Okapi Partners at (212) 297-0720 or
toll-free at (877) 279-2311 or by email at
info@okapipartners.com.
We thank you for your support.
Christopher Shackelton and Adam Gray
Coliseum Capital Management, LLC
FORWARD-LOOKING STATEMENTS
Certain statements contained in this letter, and the documents
referred to in this letter, are “forward-looking statements” and
are prospective. These statements may be identified by their use of
forward-looking terminology such as the words “expects”,
“projects”, “believes”, “anticipates”, “intends” or other similar
words. Forward-looking statements are not based on historical
facts, but rather on current expectations and projections about
future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking
statements. These statements are subject to inherent risks and
uncertainties surrounding future expectations. Important factors
that could cause actual results to differ materially from the
expectations set forth in this letter include, among other things,
the factors identified under the section entitled “Risk Factors” of
Accuride’s proxy statement and other risk factors contained in
Accuride’s Annual Report on Form 10-K for the year ended
December 31, 2015. Such forward-looking statements should
therefore be construed in light of such factors, and Coliseum is
under no obligation and expressly disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
Important Additional Information
This communication may be deemed to be solicitation material in
respect of the proposed transaction. Coliseum filed a preliminary
proxy statement and related materials with the SEC on October 21,
2016 in connection with the special meeting of Accuride
stockholders in connection with the proposed transaction. The
preliminary proxy statement contains, and Coliseum’s definitive
proxy statement will contain, important information about the
proposed transaction and related matters. ACCURIDE STOCKHOLDERS ARE
URGED TO READ THE PRELIMINARY PROXY STATEMENT, AND THE DEFINITIVE
PROXY STATEMENT, WHEN IT IS FILED, AND OTHER RELEVANT MATERIALS
CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors may obtain a
free copy of these materials and other documents filed by the
Company with the SEC at the SEC’s website at www.sec.gov.
Participants in the Solicitation
Coliseum Capital Management, LLC, Coliseum Capital, LLC,
Coliseum Capital Partners, L.P., Coliseum Capital Partners II,
L.P., Adam Gray, Christopher Shackelton and Christopher Murphy may
be deemed to be participants in soliciting proxies from Accuride
stockholders in connection with the proposed transaction.
Information regarding the persons who may, under the rules of the
SEC, be considered to be participants in the solicitation of the
Accuride stockholders in connection with the proposed transaction
and any direct or indirect interests they may have in the proposed
transaction is set forth in the preliminary proxy statement, which
was filed with the SEC on March 21, 2016. To the extent that
holdings of the Company’s securities have changed since the amounts
set forth in the preliminary proxy statement, such changes have
been or will be reflected on Statements of Change in Ownership on
Form 4 and Schedule 13D filings of Coliseum with the SEC.
About Coliseum Capital Management, LLC
Coliseum Capital is an investment firm founded in 2005 by
Managing Partners Chris Shackelton and Adam Gray, which
focuses on long-term investments in both public and private
companies. Coliseum directs capital behind strong management teams,
with a willingness to work alongside companies to facilitate
further value creation.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161021005947/en/
ColiseumColiseum Capital Management,
LLC203-883-0100orInvestorsOkapi Partners LLCBruce H.
Goldfarb / Patrick McHugh / Lisa Patel,
212-297-0720info@okapipartners.comorMediaSard Verbinnen
& Co.Chris Kittredge / David Millar, 212-687-8080
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