Agreement Provides for Immediate Appointment of
Three Directors from Donerail’s Slate and, if Needed, Future
Appointments of a Donerail Designee and Another Mutually Agreed
Upon Director Based on the Outcome of Comprehensive Alternatives
Process
Strategic Committee – Which Will Include Two
Incumbent Directors, Two New Directors from Donerail’s Slate, and
Donerail Managing Partner William Wyatt as Observer – Will Oversee
Process and Engagement with Potential Buyers, Including Those who
Proactively Reached Out in Recent Weeks
Leading gaming accessory maker Turtle Beach Corporation (Nasdaq:
HEAR) (“Turtle Beach” or the “Company”) today announced it has
reached an agreement with The Donerail Group LP, SCW Capital
Management and other participants in their stockholder group
(collectively, “Donerail”) on a meaningful refreshment of the
Company’s Board of Directors (the “Board”). In addition, the
Company disclosed its formation of a Strategic Review Committee
(the “Strategic Committee”) that is overseeing an expanded and
wide-ranging process to identify a buyer for the business. The
Cooperation Agreement between the Company and Donerail will be
filed on Form 8-K with the Securities and Exchange Commission.
Board Refreshment
In connection with the Cooperation Agreement, Turtle Beach is
appointing three members of the Donerail slate to the Board. In
addition, one current Turtle Beach director will retire from the
Board. Additional detail related to these board changes will be
separately disclosed.
Following a 120-day period, in the event that the Company
continues to be a stand-alone entity, a Donerail principal will be
added to the Board and another incumbent director will retire from
the Board. Following the appointment of the fourth new director,
the Board will be expanded to nine members, and the Board will
appoint a fifth new director who will be independent and mutually
selected by the Company and Donerail.
Strategic Committee, Expanded and Wide-Ranging Strategic
Alternatives Process
As previously disclosed, the Board has been engaged in a
banker-led, proactive process to evaluate available strategic
opportunities, including a sale of the Company. As the Company
continues to engage in ongoing discussions with active participants
in the process, it has reached out to additional strategic buyers
and financial sponsors, including certain parties that made inbound
inquiries over the past few weeks and those that previously
indicated interest. The Strategic Committee, which will include two
incumbent directors and two Donerail designees, will oversee the
ongoing, expanded strategic alternatives process. Donerail’s
Managing Partner, William Wyatt, will serve as an observer to the
Committee.
The Board and management team remain simultaneously focused on
executing against the Company’s strategic plan to drive value for
all stockholders.
“The Strategic Committee will oversee our process and ensure we
are exploring all possible avenues to maximize value for our
stockholders,” said Juergen Stark, CEO and Chairman of Turtle
Beach. “We are firmly committed to executing on our fiduciary duty
and acting in the best interest of all our stockholders, and we are
moving forward with purpose. Through consistent execution, we have
built a growing and increasingly diversified gaming accessories
business that has significant long-term potential in a nearly $9
billion addressable market. We are pleased to have reached a
constructive resolution with Donerail that will enable us to
conduct this process without the distraction of a proxy contest,
while the management team continues to execute our strategy and
capture the value inherent in the business. We look forward to
welcoming the newly appointed directors to the Turtle Beach Board
and benefitting from fresh perspectives as we work towards our
collective goal of maximizing value for all stockholders.”
“Turtle Beach is an iconic, industry leader that has been the
industry standard for over a decade,” said William Wyatt, Managing
Partner of The Donerail Group. “We are pleased to have this contest
behind us and start working together for the benefit of all of the
Company’s shareholders and stakeholders. We look forward to joining
the Strategic Review Committee’s ongoing efforts to ensure value is
maximized for all shareholders.”
The Company notes that there can be no assurance that the
process will result in a transaction or announcement of any
kind.
Turtle Beach does not intend to comment further regarding its
ongoing strategic review unless a specific transaction is approved
by the Board, the process is concluded or it is otherwise
determined that further disclosure is appropriate or required by
law.
Advisors
BofA Securities is serving as financial advisor to Turtle Beach
and Orrick, Herrington & Sutcliffe LLP and Vinson & Elkins
L.L.P. are serving as legal counsel to Turtle Beach.
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.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220516005395/en/
Turtle Beach Contacts
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
Joele Frank, Wilkinson Brimmer Katcher Jed Repko / Nick
Lamplough 212.355.4449
Donerail Contacts
Longacre Square Partners Greg Marose / Ashley Areopagita,
646-386-0091 gmarose@longacresquare.com /
aareopagita@longacresquare.com
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