Star Equity Fund Issues Statement on Successful Campaign at Superior Drilling Products
08 7월 2024 - 9:30PM
Star Equity Fund, LP and affiliates (“Star Equity Fund”,
“we”, “our”), an approximate 10% shareholder of Superior Drilling
Products, Inc. (NYSE American: SDPI) (“SDPI” or the “Company”),
announced today a successful conclusion to its campaign at SDPI.
Under pressure from our campaign, the Company
announced its sale to Drilling Tools International (“DTI”) on March
7, 2024. Details of the transaction, which was unanimously approved
by the Boards of both DTI and SDPI and a Special Committee of the
Board of SDPI (the “SDPI Special Committee”), are available in the
Form S-4 filed with the SEC on May 10, 2024 (the “S-4”). The
transaction is expected to close in the third quarter of 2024.
We catalyzed the sale of SDPIWe do not believe
SDPI’s Board of Directors would have put the Company up for sale
had we not encouraged them to do so beginning in 2022. In our open
letters to the Company’s Board, issued in 2022 and again in 2023,
we insisted that remaining a small public company would be a poor
outcome for SDPI shareholders given the Company’s high SG&A
expenses, including management compensation and public-company
costs, as a percentage of revenue.
While we made a variety of recommendations to
the SDPI Board in our letters, we have consistently emphasized that
a sale of SDPI to a larger company would be in the best interest of
shareholders. We believe our persistence in this recommendation
directly resulted in the Company hiring a financial advisor to
explore strategic alternatives as announced on May 22, 2023 and,
ultimately, SDPI selling itself to DTI.
We will vote FOR the saleWe believe the Company
made the right decision to sell itself and we support the
transaction with DTI. Therefore, we will vote FOR the sale and we
look forward to becoming DTI shareholders. We believe this sale to
DTI best aligns with our goals of maximizing value for all SDPI
shareholders and creating a thriving, well-regarded Company where
customers, employees, and shareholders all benefit from its
products, services, and overall presence in the marketplace.
We are disappointed with the SDPI Board’s management of
the sale processWhile we are pleased that our campaign led
to a positive outcome for SDPI shareholders, we are very
disappointed with the SDPI Board’s handling of the sale process,
especially the SDPI Special Committee consisting of directors
Lines, Ronca, and Iverson. Specifically, according to the
“Background of the Merger” section of the S-4, SDPI’s financial
advisor fielded unsolicited interest in SDPI but, at the direction
of the SDPI Special Committee, did not actively solicit potential
buyers. This is a difficult decision to understand given the public
show the Company made of hiring a financial advisor on May 22,
2023. What exactly did the financial advisor do for its fee of $2.5
million? Excessive financial advisor fees, legal fees, and
management transaction bonuses will result in an extremely high
cost to the Company (and, thus, to DTI) – estimated to be $5.2
million in the S-4 – representing approximately 16% of transaction
value. As disclosed in the S-4, when DTI learned about SDPI’s
transaction costs, it reduced its cash acquisition consideration
and threatened to walk away from the deal. This latest grievance,
unfortunately, is in line with our historically expressed concerns
about the shareholder-mindedness of SDPI’s “independent” directors
who have a long history of harming shareholder rights and
shareholder value at SDPI. Our hope is that directors Lines, Ronca,
and Iverson never again serve on a public company board.
We look forward to voting FOR the sale of SDPI
to DTI and are pleased that our efforts yielded value for
long-suffering SDPI shareholders. We believe the corporate
governance and shareholder orientation of DTI’s Board of Directors
post-transaction will leave former SDPI shareholders in better
hands than they were in previously and believe this transaction
will be beneficial to shareholders of both companies.
About Star Equity Fund, LPStar
Equity Fund, LP is an investment fund managed by Star Equity
Holdings, Inc. Star Equity Fund seeks to unlock shareholder value
and improve corporate governance at its portfolio companies.
About Star Equity Holdings,
Inc.Star Equity Holdings, Inc. is a diversified holding
company currently composed of two divisions: Building Solutions and
Investments.
For more information contact: |
|
Star Equity Fund, LP |
The Equity
Group |
Jeffrey E. Eberwein |
Lena Cati |
Portfolio Manager |
212-836-9611 /
lcati@equityny.com |
203-489-9501 |
Katie Murphy |
jeff.eberwein@starequity.com |
212-836-9612 /
kmurphy@equityny.com |
Superior Drilling Products (AMEX:SDPI)
과거 데이터 주식 차트
부터 7월(7) 2024 으로 8월(8) 2024
Superior Drilling Products (AMEX:SDPI)
과거 데이터 주식 차트
부터 8월(8) 2023 으로 8월(8) 2024