Board Remains Openminded to All Credible
Opportunities to Maximize Value
Leading gaming accessory maker Turtle Beach Corporation (Nasdaq:
HEAR) (“Turtle Beach” or the “Company”) today issued the following
open letter to stockholders from its Board of Directors:
Dear Fellow Stockholders,
We hope you had the opportunity to listen to
our first quarter 2022 earnings call yesterday, a replay of which
is available on our investor relations website. The Board is
serious and proactive in its duty to consider all credible
opportunities to maximize value, and we wanted to reiterate some of
the details provided with respect to our approach to strategic
alternatives.
As noted on the call, we have engaged in
banker-led, proactive outreach processes to potential acquirers on
three separate occasions in the past five years. The most recent of
those efforts began when we retained a banker in late 2020 to
engage in outreach to third parties starting in early 2021. We
subsequently made the decision in the Spring of 2021 to switch
bankers and engaged Bank of America to continue our efforts and,
since then, we have been in contact with 29 potential acquirers,
comprising the most logical potential strategic buyers as well as
select financial sponsors. Based on that outreach, we signed 10
NDAs and held 9 management meetings. As is always the case, there
is no guarantee that discussions of this nature will result in a
transaction.
We received feedback from prospective buyers
and their advisors throughout the course of this extensive
engagement. In several cases we heard that potential buyers were
unwilling to move forward because Turtle Beach had too much
reliance on console gaming headsets and the cyclicality that comes
with that, which is consistent with the feedback we received in
prior rounds of outreach. This is one of the many reasons we have
pursued our value-creating diversification strategy.
It is also important to reiterate that in the
prior two rounds of outreach we received bids that would have been
unattractive to our stockholders. In both cases, our stock price
was trading at low levels based on overall market conditions, and
the offers undervalued Turtle Beach. We subsequently drove higher
value for stockholders than the bids offered. This is, in part, why
we believe that the right course of action is to continue executing
our strategy, which we believe will enhance value in the context of
either a standalone entity or in a potential transaction.
The Board’s openness to value-maximizing
opportunities was also clear in our full and good faith engagement
with Donerail, where Turtle Beach repeatedly tried to establish
Donerail’s financing in order to make their bid real and
actionable. Despite our efforts, Donerail could not, or would
not, verify their financing, unlike other credible potential
buyers. Furthermore, the proxy contest being waged by the Donerail
Group to gain control of Turtle Beach, and the Donerail Group’s
dissemination of false and misleading information about the
Company, which began mid-2021, has unfortunately deterred and
discouraged multiple potential acquirers based on feedback we’ve
received directly from these parties.
The Turtle Beach Board stands firmly
committed to executing on its fiduciary duty and acting in the best
interest of ALL stockholders. The Board continues to believe that
the best way to create value, whether as a stand-alone entity or
through strategic alternatives, is to continue to execute on a
strategy that grows the business and grows and diversifies earnings
over time.
Do not risk the value of your investment
by letting Donerail jeopardize the incredible momentum
underway. If Donerail’s hand-picked nominees are elected, we
believe Turtle Beach would be forced to execute a rushed fire-sale
of the Company that would be value destructive to Turtle Beach
stockholders.
To protect the value of your investment and
ensure Turtle Beach is positioned to achieve maximum value from any
potential future transaction, we urge you to vote the BLUE proxy
card “FOR” all of Turtle Beach’s director nominees: Juergen
Stark, Greg Ballard, Yie-Hsin Hung, William Keitel, Kelly Thompson,
and Dr. Andrew Wolfe.
We look forward to engaging with stockholders
directly in the coming weeks and to continuing to work on your
behalf to drive enhanced value.
Thank you for your support.
Sincerely, Your Turtle Beach Board of
Directors
Your
Vote Is Important, No Matter How Many or How Few Shares You
Own
You can vote by Internet,
telephone or by signing and dating the BLUE proxy card and mailing it in the envelope
provided.
If you have any questions about
how to vote your shares, or need additional assistance, please
contact:
MACKENZIE PARTNERS,
INC.
HEAR@mackenziepartners.com
(212) 929-5500
or
Toll-Free (800)
322-2885
REMEMBER:
We urge you NOT to vote using
any WHITE proxy card sent to you by Donerail, as doing so will
revoke your vote on the BLUE proxy
card.
Forward-Looking Statements
This communication includes forward-looking information and
statements within the meaning of the federal securities laws.
Except for historical information contained in this release,
statements in this release may constitute forward-looking
statements regarding assumptions, projections, expectations,
targets, intentions or beliefs about future events. Statements
containing the words “may”, “could”, “would”, “should”, “believe”,
“expect”, “anticipate”, “plan”, “estimate”, “target”, “goal”,
“project”, “intend” and similar expressions, or the negatives
thereof, constitute forward-looking statements. Forward-looking
statements involve known and unknown risks and uncertainties, which
could cause actual results to differ materially from those
contained in any forward-looking statement. Forward-looking
statements are based on management’s current belief and
expectations, as well as assumptions made by, and information
currently available to, management.
While the Company believes that its expectations are based upon
reasonable assumptions, there can be no assurances that its goals
and strategy will be realized. Numerous factors, including risks
and uncertainties, may affect actual results and may cause results
to differ materially from those expressed in forward-looking
statements made by the Company or on its behalf. Some of these
factors include, but are not limited to, risks related to, the
substantial uncertainties inherent in the acceptance of existing
and future products, the difficulty of commercializing and
protecting new technology, the impact of competitive products and
pricing, general business and economic conditions, risks associated
with the expansion of our business including the integration of any
businesses we acquire and the integration of such businesses within
our internal control over financial reporting and operations, our
indebtedness, the Company’s liquidity, and other factors discussed
in our public filings, including the risk factors included in the
Company’s most recent Annual Report on Form 10-K, Quarterly Report
on Form 10-Q, and the Company’s other periodic reports. Except as
required by applicable law, including the securities laws of the
United States and the rules and regulations of the Securities and
Exchange Commission (the “SEC”), the Company is under no obligation
to publicly update or revise any forward-looking statement after
the date of this release whether as a result of new information,
future developments or otherwise.
Important Additional Information
The Company, its directors and certain of its executive officers
are participants in the solicitation of proxies from the Company’s
stockholders in connection with the 2022 Annual Meeting of
Stockholders. The Company has filed a definitive proxy statement
and a BLUE proxy card with the SEC in connection with any such
solicitation of proxies from the Company’s stockholders.
STOCKHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ SUCH
PROXY STATEMENT, ACCOMPANYING BLUE PROXY CARD AND ALL OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY AS
THEY CONTAIN IMPORTANT INFORMATION. Information regarding the
identity of the participants and their direct or indirect
interests, by security holdings or otherwise, is set forth in the
definitive proxy statement and other materials filed with the SEC
in connection with the upcoming Annual Meeting. Stockholders can
obtain the definitive proxy statement and any amendments or
supplements to the proxy statement and other documents filed by the
Company with the SEC at no charge on the SEC’s website at
www.sec.gov. Copies are also available at no charge on the
Company’s website at https://corp.turtlebeach.com.
About Turtle Beach Corporation
Turtle Beach Corporation (https://corp.turtlebeach.com) is one
of the world’s leading gaming accessory providers. The Turtle Beach
brand (www.turtlebeach.com) is known for pioneering first-to-market
features and patented innovations in high-quality, comfort-driven
headsets for all levels of gamer, making it a fan-favorite brand
and the market leader in console gaming audio for the last decade.
Turtle Beach’s ROCCAT brand (www.roccat.com) combines detail-loving
German innovation with a genuine passion for designing the best PC
gaming products. Under the ROCCAT brand, Turtle Beach creates
award-winning keyboards, mice, headsets, mousepads, and other PC
accessories. Turtle Beach’s Neat Microphones brand
(www.neatmic.com) creates high-quality USB and analog microphones
for gamers, streamers, and professionals that embrace cutting-edge
technology and design. Turtle Beach’s shares are traded on the
Nasdaq Exchange under the symbol: HEAR.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005495/en/
For Investor Information, Contact: Cody Slach or Alex Thompson
Gateway Investor Relations On Behalf of Turtle Beach 949.574.3860
HEAR@gatewayir.com
For Media Information, Contact: MacLean Marshall Sr. Director –
PR/Communications Turtle Beach Corp. 858.914.5093
maclean.marshall@turtlebeach.com
Mackenzie Partners Bob Marese / Jeanne Carr 212.929.5405 /
212.929.5916
Joele Frank, Wilkinson Brimmer Katcher Jed Repko / Nick
Lamplough 212.355.4449
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