BELLEVUE, Wash., April 12, 2016 /PRNewswire/ -- Outerwall
Inc. ("Outerwall" or the "Company") (Nasdaq: OUTR) today announced
that it has entered into a Cooperation Agreement with Engaged
Capital, LLC ("Engaged Capital"), which beneficially owns 2,431,170
shares of Outerwall common stock, representing approximately 14.6
percent of the Company's outstanding shares. Under the terms
of the Cooperation Agreement, Outerwall has appointed Jeffrey J. Brown, Chief Executive Officer and
founding member of Brown Equity Partners, LLC, to its Board of
Directors, effective immediately. Outerwall has also agreed
to add two new independent directors to the Company's Board to be
submitted by Engaged Capital. The directors are expected to
be named on or before August 1, 2016
and the Board will consist of a maximum of nine directors at that
time.
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"We appreciate the open and constructive dialogue we have had
with all of our shareholders, including Engaged Capital, and are
pleased to have reached this agreement," said Erik E. Prusch, Outerwall's Chief Executive
Officer. "As evidenced by the recent 100 percent increase in
Outerwall's quarterly dividend and decision to explore strategic
and financial alternatives to maximize shareholder value, we are
aligned with shareholders and are taking decisive actions on their
behalf. We welcome the additional perspectives to our Board
as we continue to evaluate all strategic and financial options to
maximize shareholder value while managing our business for
profitability and cash flow."
"We applaud Outerwall for initiating a process to explore
strategic alternatives and are pleased to have been able to work
constructively with the Outerwall Board and management team to
ensure shareholder representation in the boardroom through this
important phase of the Company's lifecycle," said Glenn W. Welling, Principal and Chief Investment
Officer at Engaged Capital. "Jeff
Brown brings decades of transaction and corporate governance
experience to the Outerwall Board. We look forward to
continuing to work together with Jeff and the rest of the Board to
ensure that the Board's decisions maximize value for
shareholders."
Mr. Brown will serve in the class of directors with a term
expiring at the 2017 Annual Meeting of Stockholders. With Mr.
Brown's appointment, the Outerwall Board has been expanded to eight
directors, seven of whom are independent. The Outerwall Board
will be expanded to accommodate the two additional independent
directors upon their appointment.
Pursuant to the Cooperation Agreement, Engaged Capital has
agreed to vote all of its shares in favor of Outerwall's nominees
at the 2016 Annual Meeting of Stockholders, and has agreed to
customary standstill provisions. The full agreement between
Outerwall and Engaged Capital will be filed on a Form 8-K with the
Securities and Exchange Commission.
About Jeffrey J.
Brown
Jeffrey J.
Brown, 55, is Chief Executive Officer and a founding member
of Brown Equity Partners, LLC ("BEP"), which provides capital to
management teams and companies. Prior to founding BEP in
2007, Mr. Brown served as a founding partner of Forrest Binkley & Brown, a venture capital
and private equity firm. In his 29 years in the investment
business, Mr. Brown has served on over 40 boards of directors,
including service on seven public companies: Medifast, Inc. (Lead
Director), RCS Capital Corporation, Midatech Pharma PLC,
Nordion, Inc., Steadfast Income REIT, Inc., Golden State Vintners,
Inc. (Chairman) and Stamps.com. Throughout his career, Mr.
Brown has also worked at Hughes Aircraft Company, Morgan Stanley
& Company, Security Pacific Capital Corporation and Bank of
America Corporation.
About Outerwall
Outerwall Inc. (Nasdaq: OUTR) has
more than 20 years of experience creating some of the most
profitable spaces for their retail partners. The company delivers
breakthrough kiosk experiences that delight consumers and generate
revenue for retailers. As the company that brought consumers
Redbox® entertainment, Coinstar® money services, and ecoATM®
electronics recycling kiosks, Outerwall is leading the next
generation of automated retail and paving the way for inventive,
scalable businesses. Outerwall™ kiosks are in neighborhood grocery
stores, drug stores, mass merchants, malls, and other retail
locations in the United States,
Canada, Puerto Rico, the United Kingdom, and Ireland. Learn more at www.outerwall.com.
About Engaged Capital
Engaged Capital, LLC ("Engaged
Capital") was established in 2012 by a group of professionals with
significant experience in activist investing in North America and was seeded by Grosvenor
Capital Management, L.P., one of the oldest and largest global
alternative investment managers. Engaged Capital is a limited
liability company owned by its principals and formed to create
long-term shareholder value by bringing an owner's perspective to
the managements and boards of undervalued public companies. Engaged
Capital manages both a long-only and long/short North American
equity fund. Engaged Capital's efforts and resources are dedicated
to a single investment style, "Constructive Activism" with a focus
on delivering superior, long-term, risk-adjusted returns for
investors. Engaged Capital is based in Newport Beach, California.
Forward Looking Statements
Certain statements in this
press release are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.
Words indicating future events, performance, results and actions,
such as "will" and "expect," and variations of such words, and
similar expressions identify forward-looking statements, but their
absence does not mean that a statement is not
forward-looking. The forward-looking statements in this press
release include, among others, statements regarding Company
interactions with and actions relating to investors, exploration of
strategic and financial alternatives, annual meeting and board
composition matters, and execution of business strategies.
Forward-looking statements are not guarantees of future actions,
events or performance, which may vary materially from those
expressed or implied in such statements. Differences may
result from, among other things, actions taken by the Company or
investors, including Engaged Capital, or other third parties,
including those beyond the Company's control. Such risks and
uncertainties include, but are not limited to, results of
interactions with third parties, including investors, actions by
the Company's board and management and investors, results and
timing of strategic and financial alternatives, and related
transactions and actions, continuation of or changes in strategic
and financial objectives, and the ability to attract new or
maintain retailer relationships, penetrate or maintain markets and
distribution channels, and react to changing consumer
demands. The foregoing list of risks and uncertainties is
illustrative, but by no means exhaustive. For more
information on factors that may affect future performance, results
or actions, please review "Risk Factors" described in our most
recent Annual Report on Form 10-K and subsequent Quarterly Reports
on Form 10-Q filed with the Securities and Exchange Commission
("SEC"), as well as other public filings with the SEC. These
forward-looking statements reflect the Company's expectations as of
the date hereof. The Company undertakes no obligation to
update the information provided herein.
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SOURCE Outerwall Inc.