Investor Group Owning Over 40% of Leaf Group Comments on Media Report Confirming that Company’s Strategic Review Was a Sham...
August 31 2020 - 08:30AM
Business Wire
Sources Cited in Media Report Describe How Leaf
Group Failed to Engage in a True, Good Faith Review
Parties Who Have Had or Currently Have Interest
in Acquiring All or Parts of Leaf Group May Contact the Investor
Group at www.LiberateLeaf.Group
Investors owning more than 40% of Leaf Group Ltd. ("Leaf Group"
or the "Company") (NYSE: LEAF), which includes Osmium Partners LLC,
PEAK6 Investments LLC, Boyle Capital Opportunity Fund, LP, Oak
Management Corp., Generation Capital Partners II LP, Generation
Partners II LLC, Spectrum Equity Investors V, L.P. and Spectrum V
Investment Managers’ Fund, L.P. (together, the "Investor Group"),
today issued the following statement commenting on an August 28th
article published on www.CorpGov.com (“Leaf Group’s Stubborn Desire
to Go it Alone”)1.
“This recent media report cites several sources who provide
further damning evidence supporting our belief that Leaf Group’s
‘strategic review’ was a sham process. We urge all shareholders to
read the full article, but several elements are worth noting
here:
- The report cites one potential strategic buyer as indicating
that ‘the company broke many normal rules of conduct in a sale
process, effectively ruling out the possibility of doing a deal of
any kind.’
- According to that individual, ‘There weren’t any chances to
meet senior management to discuss details or access to a so-called
data room, which normally serves to provide potential buyers with
critical information that isn’t given to the public.’
- Further, the article cites another person close to the Company
as noting that ‘Mr. Moriarty has shown a lack of interest in
selling parts of the business in the past.’
- According to the article, that person also noted that Mr.
Moriarty seemed to conduct himself like a controlling shareholder
or imperial CEO despite the fact that Mr. Moriarty owns very little
of Leaf Group’s outstanding stock.
- The report also reiterates, the so-called ‘independent’ review
of strategic alternatives was led by a director with ties to Mr.
Moriarty and who, the Board has now admitted, was not
independent.
It is increasingly clear why the ‘process did not yield a single
offer for the whole company’ over 13 months – an inconceivable
outcome. Because buyers weren’t provided the opportunity to make an
informed bid.
In light of these new revelations, we once again call on the
Board to allow former directors – two of whom are principals at
investment firms that are participants in the Investor Group – to
disclose their first-hand observations regarding the strategic
alternatives process.
Further, we again urge the Board to immediately terminate Sean
Moriarty and refresh the Board with individuals chosen by Leaf
Group’s shareholders. Given the significant failings and apparent
management interference with the strategic alternatives process, we
also call upon Leaf’s directors to start a new process that will be
overseen by an active, refreshed and objective Board.
We also note that any other party that had or has interest in
acquiring all or parts of Leaf Group may contact the Investor Group
at www.LiberateLeaf.Group.”
About Osmium Partners
We seek to generate strong, risk-adjusted returns by investing
in undervalued, small capitalization companies across equity
markets. Our Osmium 8 research process is based on eight simple
factors involving factors such as balance sheet strength, aligned
interests, attractive reinvestment opportunities, a low valuation,
and reasonable growth prospects. As engaged owners, we actively
discuss corporate strategy and capital structure with management
teams and boards of directors. We prefer to conduct these
discussions in private, but we will publicly debate important items
with all shareholders when appropriate.
About PEAK6
PEAK6 uses technology to find a better way of doing things. The
company's first tech-based solution was developed in 1997 to
optimize options trading and, over the past two decades, the same
formula has been used across a range of industries, asset classes
and business stages to consistently deliver superior results.
Today, PEAK6 seeks transformational opportunities to provide
capital and strategic support to entrepreneurs and forward-thinking
businesses, helping to unlock potential and activate what is into
what ought to be. PEAK6's core brands include: PEAK6 Capital
Management, Apex Clearing, National Flood Services and Evil
Geniuses. Learn more at www.PEAK6.com or follow us on LinkedIn.
About Boyle Capital Opportunity Fund
Boyle Capital Opportunity Fund, LP is a value-oriented
investment partnership. We manage a focused portfolio of deeply
undervalued securities and actively engage with the company's
management and board of directors to unlock shareholder value over
the long-term.
About Oak Investment Partners
Oak Investment Partners was founded in 1978. Since that time,
the firm has invested $9 billion in over 525 companies around the
world, earning the trust of entrepreneurs with a senior team that
delivers steady guidance, deep domain expertise and a consistent
investment philosophy. We are involved in the formation of
companies, fund spinouts of operating divisions and technology
assets, and provide growth equity to mid- and late-stage private
businesses and to public companies through PIPE investments. These
companies are concentrated in the five major sectors that fuel the
most disruptive growth in our world today: Information Technology,
FinTech, Internet and Consumer, Healthcare Services, and Clean
Energy.
About Generation Partners
Founded in 1995, Generation Partners provides equity capital to
growth companies through buyout and growth equity investments.
About Spectrum Equity
Spectrum Equity is a leading growth equity firm providing
capital and strategic support to innovative companies in the
information economy. For over 25 years, the firm has partnered with
proven entrepreneurs and management teams to build long-term value
in market-leading internet, software and information services
companies. Representative investments include Ancestry, Bats Global
Markets, Definitive Healthcare, GoodRx, Grubhub, Lynda.com, Origami
Risk, SurveyMonkey and Verafin. For more information, including a
complete list of portfolio investments, visit
www.spectrumequity.com.
1 CorpGov, “Leaf Group’s Stubborn Desire to Go it Alone,” August
28, 2020,
https://corpgov.com/leaf-groups-stubborn-desire-to-go-it-alone/
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200831005344/en/
Media: Sloane & Company Dan Zacchei / Joe Germani
dzacchei@sloanepr.com / jgermani@sloanepr.com
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