Exhibit A
Turtle Beach Board of Directors Issues Open
Letter to Stockholders Highlighting Record of
Proactive Engagement with Potential
Acquirers
Board Remains Openminded to All Credible
Opportunities to Maximize Value
WHITE PLAINS, N.Y. – May 5, 2022 – 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.