Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer
and marketer of proprietary disposable devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and endoscopy,
today confirmed that it has received notice from Starboard Value LP
(“Starboard”) that it has nominated seven individuals to stand for
election as directors at Merit’s 2020 Annual Meeting of
Shareholders (the “Annual Meeting”). In its notice to Merit,
Starboard indicated that it intends to withdraw four of its seven
nominees if there are only three seats on Merit’s Board to be
filled at the Annual Meeting. The date of the Annual Meeting has
not yet been set.
Members of Merit’s Board and management team recently had an
initial discussion with representatives of Starboard, and Merit
looks forward to further engagement to better understand
Starboard’s ideas. Merit values constructive input from all
shareholders toward the shared goal of enhancing stakeholder
value.
Merit is focused on becoming a leaner, more efficient growth
company, and took significant actions during the third and fourth
quarters of 2019 to improve performance and free cash flow, and
enhance financial flexibility. Merit is also taking actions to
expand its pipeline to drive future results, particularly in
electrophysiology and vascular access. Overall, Merit currently
expects to release 10-15 new products in the coming months.
The Merit Board is comprised of highly qualified and diverse
directors who have substantial business, financial and medical
experience with extensive knowledge of Merit’s products, global
footprint and procedures. Merit’s Environmental, Social and
Governance Committee regularly evaluates the Board’s composition to
ensure that Merit’s directors collectively provide the diversity,
background and experience necessary to advance Merit’s long-term
strategy and stakeholder interests. As a result of these regular
assessments, two of Merit’s current directors – Jill Anderson and
Lynne Ward – were appointed during 2019.
On January 21, 2020, Merit announced that Kent Stanger,
co-founder and former Merit CFO, will not stand for re-election at
the upcoming Annual Meeting. As a result, Merit will reduce the
size of its Board to nine directors effective as of the Annual
Meeting.
Merit’s Environmental, Social and Governance Committee will
review Starboard’s notice of nomination pursuant to established
policies. The Board will present its recommendations regarding
director nominations in due course. Merit shareholders do not need
to take action at this time.
Wells Fargo Securities, LLC is serving as financial advisor to
Merit, and Skadden, Arps, Slate, Meagher & Flom LLP is serving
as legal counsel.
ABOUT MERITFounded in 1987, Merit Medical
Systems, Inc. is engaged in the development, manufacture and
distribution of proprietary disposable medical devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and endoscopy.
Merit serves client hospitals worldwide with a domestic and
international sales force and clinical support team totaling in
excess of 300 individuals. Merit employs approximately 6,350 people
worldwide with facilities in South Jordan, Utah; Pearland, Texas;
Richmond, Virginia; Malvern, Pennsylvania; Rockland, Massachusetts;
Aliso Viejo, California; Maastricht and Venlo, The Netherlands;
Paris, France; Galway, Ireland; Beijing, China; Tijuana, Mexico;
Joinville, Brazil; Markham, Ontario, Canada; Melbourne, Australia;
Tokyo, Japan; Reading, United Kingdom; Johannesburg, South Africa;
and Singapore.
FORWARD-LOOKING STATEMENTS
Statements contained in this release which are not purely
historical, including, without limitation, statements regarding the
preparations for and outcome of the Annual Meeting, actions which
may be taken by Starboard and any response from Merit, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to risks
and uncertainties such as those described in Merit’s Annual Report
on Form 10 K for the year ended December 31, 2018 and subsequent
filings with the Securities and Exchange Commission. Such risks and
uncertainties include inherent risks and uncertainties relating to
Merit’s potential inability to successfully commercialize
technology developed internally or acquired through completed,
proposed or future transactions; expenditures relating to research,
development, testing and regulatory approval or clearance of
Merit’s products and risks that such products may not be developed
successfully or approved for commercial use; governmental scrutiny
and regulation of the medical device industry, including
governmental inquiries, investigations and proceedings involving
Merit; infringement of Merit’s technology or the assertion that
Merit’s technology infringes the rights of other parties; actions
of activist shareholders, including a proxy contest; product
recalls and product liability claims; changes in customer
purchasing patterns or the mix of products Merit sells; risks and
uncertainties associated with Merit’s information technology
systems, including the potential for breaches of security and
evolving regulations regarding privacy and data protection; the
pending exit of the United Kingdom from the European Union and
uncertainties about when, how or if such exit will occur; potential
for significant adverse changes in governing regulations, including
reforms to the procedures for approval or clearance of Merit’s
products by the U.S. Food & Drug Administration or comparable
regulatory authorities in other jurisdictions; increases in the
prices of commodity components; negative changes in economic and
industry conditions in the United States or other countries;
termination or interruption of relationships with Merit’s
suppliers, or failure of such suppliers to perform; development of
new products and technology that could render Merit’s existing or
future products obsolete; market acceptance of new products;
modification or limitation of governmental or private insurance
reimbursement policies; changes in healthcare policies or markets
related to healthcare reform initiatives; changes in key personnel;
work stoppage or transportation risks; introduction of products in
a timely fashion; price and product competition; availability of
labor and materials; fluctuations in and obsolescence of inventory;
and other factors referred to in Merit’s Annual Report on Form 10 K
for the year ended December 31, 2018 and other materials filed with
the Securities and Exchange Commission. All subsequent
forward-looking statements attributable to Merit or persons acting
on its behalf are expressly qualified in their entirety by these
cautionary statements. Actual results will likely differ, and may
differ materially, from anticipated results. Financial estimates
are subject to change and are not intended to be relied upon as
predictions of future operating results, and Merit assumes no
obligation to update or disclose revisions to those estimates.
Important Additional Information and Where to Find
It
Merit plans to file a proxy statement (the “2020 Proxy
Statement”) with the SEC in connection with the solicitation of
proxies for the Annual Meeting, together with a BLUE proxy card.
SHAREHOLDERS ARE URGED TO READ THE 2020 PROXY STATEMENT (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT
DOCUMENTS THAT MERIT FILES WITH THE SEC CAREFULLY IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Shareholders will be able to obtain, free of charge, copies of
the 2020 Proxy Statement, any amendments or supplements thereto and
any other documents (including the BLUE proxy card) when filed by
Merit with the SEC in connection with the Annual Meeting at the
SEC’s website (http://www.sec.gov), at Merit’s website
(http://www.merit.com/investors) or by contacting Innisfree M&A
Incorporated by phone at (888) 750-5834, by email at
info@innisfreema.com or by mail at 501 Madison Avenue, 20th Floor,
New York, NY 10022.
Participants in the Solicitation
Merit, its directors and certain of its executive officers and
employees may be deemed to be participants in the solicitation of
proxies from shareholders in connection with the Annual Meeting.
Additional information regarding the identity of these potential
participants, none of whom (other than Fred P. Lampropoulos,
Merit’s Chairman and Chief Executive Officer) owns in excess of one
percent (1%) of Merit’s shares, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in
the 2020 Proxy Statement and other materials to be filed with the
SEC in connection with the Annual Meeting. Information relating to
the foregoing can also be found in Merit’s definitive proxy
statement for its 2019 annual meeting of shareholders (the “2019
Proxy Statement”), filed with the SEC on April 11, 2019. To the
extent holdings of Merit’s securities by such potential
participants (or the identity of such participants) have changed
since the information printed in the 2019 Proxy Statement, such
information has been or will be reflected on Statements of
Ownership and Change in Ownership on Forms 3 and 4 filed with the
SEC.
Contacts
Media: Matthew Sherman / Tim Lynch Joele Frank,
Wilkinson Brimmer KatcherPhone: (212) 355-4449
Investors:Arthur Crozier / Larry Miller
Innisfree M&A IncorporatedPhone: (212)
750-5833
Anne-Marie WrightMerit Medical Systems,
Inc.Phone: (801) 208-4167
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