GREENWICH, Conn., March 31, 2017 /PRNewswire/ -- Iron Compass LLC ("Iron Compass") today sent a letter to the board of directors (the "Board") of Simpson Manufacturing Co., Inc., ("Simpson" or the "Company") in response to the Company's special meeting of stockholders, held on March 28, 2017 (the "Special Meeting") and to announce the release of a presentation regarding the Company and its Board of Directors (the "Board") titled "Change Required at Simpson Manufacturing." The presentation can be found at www.fixsimpson.com.
The full text of the letter follows.
March 31, 2017
Simpson Manufacturing Co., Inc.
Attn: Board of Directors
5956 W. Las Positas Blvd.
Pleasanton, CA 94588
Dear Board Members:
We believe sweeping change is necessary at the Company, and we encourage you to visit our presentation titled "Change Required at Simpson Manufacturing" at www.fixsimpson.com. The presentation discusses Simpson's current problems, including the lack of shareholder value creation, bloated overhead cost structure, misguided strategy with limited disclosure, poor capital allocation, poor judgement on compensation and a culture of resisting governance change.
The need for operational change is of paramount importance, but we also remain skeptical about the Board's commitment to significant governance change. The Board only acted to implement the meaningful change of declassification after losing a fight in which the Company attempted to exclude the declassification proposal that we had submitted for inclusion in the Company's 2017 annual meeting proxy materials. Furthermore, we believe that the Company's "all or none" offer to implement the proposals only if stockholders adopted both proposals was disenfranchising because stockholders wishing to retain cumulative voting were dis-incentivized from voting to declassify the Board. We believe the democratic path would have been to allow stockholders to vote on each proposal separately, with the Board's commitment to implement whichever ones passed.
If the Company cannot implement material operational change, then the Board should consider engaging an investment bank to conduct a full review of strategic alternatives. You are likely already well aware of Simpson's longstanding appeal to potential acquirers, as evidenced by your decision to implement a poison pill. Thankfully that poison pill has now been removed, and if bidders come calling, you should not ignore or dismiss their inquiries. Bidders also have the ability and may be well-advised to express their interest directly to us or other shareholders in order to ensure proper engagement from the Board.
Regardless, now that the Board is moving toward full declassification, in 2018 stockholders will finally be able to hold the Board accountable and enact wholesale changes because a majority of the Board will be up for election. In the coming months, you have a brief window of opportunity to address the aforementioned problems at the Company while we and others closely monitor your performance. In light of the elimination of cumulative voting, and considering the opportunity for more substantial Board change next year, our affiliated investment fund, Iron Compass Partners, LP is withdrawing its director nomination for the 2017 annual meeting of stockholders. In light of the declassification proposal adopted at the special meeting, we are likewise withdrawing our shareholder proposal for declassification that was slated to be included on the company's 2017 proxy statement.
We continue to closely monitor our investment in the Company and expect that our fellow stockholders may also wish to hold the Board and management accountable to help build a better Simpson.
Iron Compass LLC
About Iron Compass
Iron Compass endeavors to be a long term owner of 'classically great' businesses. These are companies we believe have a distinct competitive advantage that allows them to generate high returns on invested capital, stable cash flow, and growth over the long term. The greatest businesses seek to outperform contemporaneously in both operations and capital management. www.ironcompassinvestors.com.
The materials in this press release and the presentation titled "Change Required at Simpson Manufacturing" shall not constitute a solicitation of proxies or the solicitation or recommendation of any vote or approval in any jurisdiction pursuant to or in connection with any meeting of stockholders of Simpson Manufacturing Co., Inc.
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SOURCE Iron Compass LLC