Coppersmith Capital Issues Statement Regarding Alere Annual Meeting
NEW YORK--(BUSINESS WIRE)--Coppersmith Capital Management, LLC today issued the following statement in response to the apparent election of Alere Inc.’s (NYSE:ALR) nominees to the Board of Directors at yesterday’s annual meeting.
Jerome Lande, Managing Partner at Coppersmith, said, “Starting in 2012 we proposed meaningful changes at Alere because its performance has been poor and declining for years, its leverage is excessive and its board has routinely failed to allocate capital wisely or hold management accountable. As a result of our efforts and the extraordinary support we received from our fellow stockholders, Alere has made many positive changes and commitments for which it will be held accountable:
- Organic growth expanding to high single-digits by 2015
- 28.0% SG&A margin for full-year 2015
- Total R&D spending to stay at $155mm a year through 2015
- Leverage target of 3.0x by the end of 2015
- Near-term divestiture proceeds of at least $600mm, including the Proctor & Gamble JV with potentially higher proceeds from toxicology assets
- Appointing a Lead Independent Director
- Adopting majority voting for director elections
- Stockholder ability to call a special meeting
- Five new independent directors out of an eleven-member board
Lande continued: “These measures are promises from management and the new board, for which we fully expect stockholders to hold them accountable – now and in the future. Notably, even with these concessions across virtually every issue we raised, we estimate stockholders still came within a few percentage points of electing the Coppersmith nominees. Moreover Alere’s nominees prevailed only because of the switch of support from Coppersmith to Alere at the eleventh hour by two of the company’s largest stockholders, we believe. This resounding level of support for Coppersmith’s nominees, and the extraordinary commitments we believe management made to secure a last-second victory, make it clear that the clock is ticking for performance and accountability at Alere.”
“One of the positive results of this process was that it caused the new directors to hear firsthand the long-standing frustration of stockholders, and we expect that as a result they will objectively evaluate all strategies to unlock value at Alere. Moreover, we hope they will respond by instituting a culture of accountability and providing an appropriate counterbalance to management. We look forward to maintaining a constructive dialogue with the new board to make sure the right strategies are embraced for all stockholders.”
“We want to thank our fellow stockholders for their support and contribution to this long overdue and healthy debate about the future of our company, and encourage them to keep up the pressure so that accountability for Alere management and the new board continues beyond this annual meeting.”