Synalloy Files Definitive Proxy Statement and Sends Letter to Shareholders
Recommends Shareholders Sign, Date, and Promptly Return the BLUE Proxy Card to Support Synalloy’s Independent, Experienced and Highly Qualified Directors
The letter to shareholders highlights the Company’s recent operational achievements and extensive constructive efforts to engage with
Dear Synalloy Shareholders,
Thank you for your continued investment in
Your Board and Management Team Have Assembled High Quality Assets and Have Overseen Steady Capital Allocation Through Multiple Business Cycles
In 2018, the Company produced record operating profits and Adjusted EBITDA, up 30% and 71%, respectively, over previous Company records set in 2014.1 In 2019,
History of Constructive Engagement with Privet, Which has Repeatedly Tried to Buy All or Parts of
Your Board has continuously and constructively engaged with Privet since it first became a shareholder in the Company four years ago. During this time, we have regularly welcomed — and in many cases, implemented — feedback from Privet, including on our strategic plan and M&A prospects. Indeed, we also entered into a bilateral NDA with Privet that lasted for 13 months in order to facilitate our robust engagement. Shareholders should be reminded that, over the course of its investment in
Your Board Attempted to Settle with Privet and UPG to Avoid a Costly and Distracting Proxy Fight
Synalloy’s Board and management team are laser-focused on maintaining the stability of the Company’s business and workforce in the face of the COVID-19 global pandemic and highly volatile macro-economic market conditions. Despite the “ambush” style in which Privet and UPG have launched their change-of-board-control proxy fight, we have continued to engage constructively with Privet and UPG and have made several overtures to them for the benefit of all shareholders to avoid a proxy fight. This includes a fair settlement proposal which included Privet/UPG’s designation of two Board seats as well as input on governance practices that we believe are outsized relative to their combined stake in the Company. Even though Privet and UPG publicly rejected our most recent offer without offering any counter, we remain open to hearing alternatives from them in order to reach a collaborative solution.
Commitment to Delivering Value to All Shareholders Instead of Privet’s and UPG’s Ill-Timed and Speculative Turnaround Plan
Synalloy’s Board prioritizes delivering value and liquidity to shareholders, and has committed to conducting a comprehensive review of strategic alternatives with independent advisors, including a sale of all or part of the Company, and a review of management succession, once the market has stabilized following the global health and economic crisis. On the other hand, Privet and UPG are proposing a Board, business and management overhaul in the middle of a highly unstable market with — at best — a speculative and unproven plan that could jeopardize the value of your investment in
Your Board and Management Team are Constructed to Deliver Long-Term Shareholder Value
Your independent and highly qualified Board consists of experts with deep industry-specific experience in manufacturing, supply chain and logistics, as well as legal, regulatory, finance and corporate governance matters. We continue to guide the Company’s corporate strategy, while stewarding Synalloy’s business through strong corporate governance practices and routine engagement with shareholders and the implementation of their feedback. The entire management team has significant experience with manufacturing companies, including metals related businesses. At the business unit level, the Company has maintained excellent leadership continuity by retaining management teams post-acquisition.
We look forward to engaging with you as we continue to prepare for the Annual Meeting. As always, we appreciate your investment in
Very truly yours,
The Board of Directors of
The Choice is Clear – Please Sign, Date and Promptly Return the Blue Proxy Card
The Board urges you to carefully consider the information contained in the Company’s proxy materials in connection with the Annual Meeting and cast your vote on the BLUE proxy card.
- DO NOT return the white proxy card sent to you by Privet and UPG
- DO NOT vote by responding to the email solicitations sent to you by Privet and UPG
Should you have any questions, please contact the Company’s proxy solicitor Morrow Sodali:
Stockholders Call Toll Free: (800) 662-5200
This press release may include “forward-looking statements” within the meaning of the federal securities laws. All statements that are not historical facts are “forward-looking statements.” The words “estimate,” “project,” “intend,” “expect,” “believe,” “should,” “anticipate,” “hope,” “optimistic,” “plan,” “outlook,” “should,” “could,” “may” and similar expressions identify forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, including without limitation those identified below, which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements. The following factors could cause actual results to differ materially from historical results or those anticipated: adverse economic conditions; the impact of competitive products and pricing; product demand and acceptance risks; raw material and other increased costs; raw materials availability; employee relations; ability to maintain workforce by hiring trained employees; labor efficiencies; customer delays or difficulties in the production of products; new fracking regulations; a prolonged decrease in oil and nickel prices; unforeseen delays in completing the integrations of acquisitions; risks associated with mergers, acquisitions, dispositions and other expansion activities; financial stability of our customers; environmental issues; unavailability of debt financing on acceptable terms and exposure to increased market interest rate risk; inability to comply with covenants and ratios required by our debt financing arrangements; ability to weather an economic downturn; loss of consumer or investor confidence and other risks detailed from time-to-time in the Company’s
Important Other Information
The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from the Company’s shareholders in connection with the Company’s Annual Meeting. The Company has filed a definitive proxy statement and BLUE proxy card with the
1 See the Company’s Current Report on Form 8-K dated
2 The 2020 forecast excludes results of Palmer of
3 Information as of
3 year – SYNL – (25.6%); Group Average – (44.9%); Group Median – (54.8%)
5 year – SYNL – (35.5%); Group Average – (48.9%); Group Median – (66.3%)
The group of metals companies includes Universal Stainless, Timken Steel, MRC Global, Northwest Pipe, Ampco-Pittsburgh, Haynes International, Allegheny Technologies, L.B. Foster, Steel Partners, Insteel Industries, Olympic Steel, Ryerson, Nucor, Houston Wire and Cable, and Graham Corporation.