Avalara Urges Shareholders to Vote “FOR” Value
Maximizing Transaction on WHITE Proxy Card
Avalara, Inc. (NYSE: AVLR), a leading provider of tax compliance
automation for businesses of all sizes, today announced that
leading independent proxy advisory firm Institutional Shareholder
Services (“ISS”) has recommended that shareholders vote “FOR” the
pending transaction with Vista Equity Partners (“Vista”) at the
Company’s upcoming Special Meeting of Shareholders (the “Special
Meeting”) scheduled for October 14, 2022.
In its September 30, 2022, report, ISS noted1:
- “… the proposed transaction provides certainty of value, at
a premium to the unaffected price, compared to the significant
downside risk of non-approval and the uncertainty surrounding a
potential market recovery.”
- “There is a significant downside risk of non-approval;
technology companies that revise guidance and miss earnings are
heavily penalized in the current market environment, which
amplifies the downside risk. Absent this transaction, it appears
that AVLR shares could trade in the mid-to-high $60's per
share. There has been a marked decline in valuations of AVLR's
peers over the last year, a trend that has continued since the
transaction announcement.”
- “There is also significant uncertainty regarding how much
time would be needed for some combination of revenue growth,
profitability, and multiple expansion to deliver shareholder
value that is in line with historic trading levels, given
significant macroeconomic impacts including rising interest rates
and inflation. These factors raise substantial doubt that
shareholders are better served by rejecting the merger.”
- “Nonetheless, when the modest decline in projections is
evaluated in concert with the decline in valuation multiples for
AVLR and its peers, and taking into account the company's
anticipated challenges, the expected underperformance appears to
support the board's argument that the present moment is an
appropriate one to sell the company.”
The Company is pleased that ISS shares its belief that the
transaction with Vista is in the best interests of all Avalara
shareholders and supports the Board’s unanimous recommendation that
shareholders vote FOR the transaction. The transaction with Vista
delivers significant, immediate, and certain value to shareholders,
eliminating shareholders’ exposure to the execution risks and
significant macroeconomic headwinds associated with continuing as a
standalone company. The Company strongly urges all Avalara
shareholders to follow the recommendation of ISS by voting “FOR”
the value maximizing transaction with Vista on the WHITE proxy card
today to receive $93.50 per share in cash.
The transaction is expected to close in the second half of 2022,
subject to customary closing conditions, including approval by
Avalara shareholders.
Avalara shareholders who need assistance in voting their shares
may call toll-free Avalara’s proxy solicitor, Innisfree M&A
Incorporated, at (877) 687-1873 (U.S. or Canada) or +1 (412)
232-3651 (international).
A special meeting of Avalara’s shareholders to be held virtually
in connection with the proposed merger on October 14, 2022, at 9:00
a.m., Eastern Time. Shareholders will be able to attend the meeting
by visiting www.cesonlineservices.com/avlr22_vm, where they will be
able to listen to the special meeting, submit questions, and vote.
To participate in the special meeting, shareholders must
pre-register at www.cesonlineservices.com/avlr22_vm by 9:00 a.m.,
Eastern Time on Thursday, October 13, 2022. Shareholders will not
be able to attend the meeting in person.
Advisors
Goldman Sachs & Co. LLC is serving as exclusive financial
advisor to Avalara, and Simpson Thacher & Bartlett LLP and
Perkins Coie LLP are acting as legal counsel.
About Avalara
Avalara helps businesses of all sizes get tax compliance right.
In partnership with leading ERP, accounting, ecommerce, and other
financial management system providers, Avalara delivers cloud-based
compliance solutions for various transaction taxes, including sales
and use, VAT, GST, excise, communications, lodging, and other
indirect tax types. Headquartered in Seattle, Avalara has offices
across the U.S. and around the world in Brazil, Europe, and India.
More information at avalara.com.
Additional Information and Where to Find It
This communication has been prepared in respect of the proposed
transaction involving Avalara, Inc. (“Avalara”) and affiliates of
Vista Equity Partners and does not constitute a solicitation of any
vote or approval. In connection with the proposed transaction,
Avalara has filed a definitive proxy statement on Schedule 14A on
September 12, 2022 (the “Proxy Statement”) relating to a special
meeting of its shareholders with the Securities and Exchange
Commission (the “SEC”). Additionally, Avalara may file other
relevant materials in connection with the transaction with the SEC.
Shareholders of Avalara are urged to read carefully and in their
entirety the Proxy Statement and any other relevant materials filed
or that will be filed with the SEC when they become available
because they contain or will contain important information about
the proposed transaction and related matters. The Proxy Statement
has been filed with the SEC and mailed or otherwise made available
to Avalara shareholders. Shareholders will be able to obtain a copy
of the Proxy Statement, as well as other filings containing
information about the transaction that are filed by Avalara with
the SEC, free of charge on EDGAR at www.sec.gov or on the investor
relations page of Avalara’s website at investor.avalara.com.
Participants in the Solicitation
Avalara and its directors, executive officers, and certain other
members of management and employees of Avalara may be deemed to be
participants in the solicitation of proxies from the shareholders
of Avalara in respect of the proposed transaction. Information
about Avalara’s directors and executive officers is set forth in
the proxy statement for Avalara’s 2022 Annual Meeting of
Shareholders, which was filed with the SEC on April 21, 2022. Other
information regarding the persons who may, under the rules of the
SEC, be considered participants in the proxy solicitation and a
description of their interests is contained in the Proxy Statement
and other relevant materials to be filed with the SEC in respect of
the proposed transaction.
Safe Harbor for Forward-Looking Statements
Certain statements contained in this communication may
constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements include, but are not limited
to, statements regarding Avalara’s expectations regarding the
proposed transaction with affiliates of Vista Equity Partners and
the future performance and financial results of Avalara’s business
and other non-historical statements. All statements, other than
statements of historical fact, are statements that could be deemed
forward-looking statements, including statements containing the
words “predicts,” “plans,” “expects,” “anticipates,” “believes,”
“goal,” “target,” “estimate,” “potential,” “may,” “might,” “could,”
“see,” “seek,” “forecast,” and similar words. Avalara cautions
readers of this communication that such “forward-looking
statements,” wherever they occur in this communication or in other
statements attributable to Avalara, are necessarily estimates
reflecting the judgment of Avalara’s senior management and are
based on Avalara’s current plans and expectations and involve risks
and uncertainties which are, in many instances, beyond Avalara’s
control, and which could cause actual results to differ materially
from those included in or contemplated or implied by the
forward-looking statements. Such risks and uncertainties include,
among others: (i) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement; (ii) the failure to obtain approval of the proposed
transaction by Avalara shareholders; (iii) the failure to obtain
required regulatory approval to the completion of the proposed
transaction or the failure to satisfy any of the other conditions
to the completion of the proposed transaction, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the proposed merger; (iv) the risk that the
proposed merger will not be consummated in a timely manner,
including if the debt and equity financing for the proposed
transaction is not funded in accordance with their respective
terms; (v) the effect of the announcement of the proposed
transaction on the ability of Avalara to retain and hire key
personnel and maintain relationships with its key business partners
and customers, and others with whom it does business, or on its
operating results and businesses generally; (vi) the response of
competitors to the proposed transaction; (vii) risks associated
with the disruption of management’s attention from ongoing business
operations due to the proposed transaction; (viii) the ability to
meet expectations regarding the timing and completion of the
proposed transaction; (ix) significant costs associated with the
proposed transaction; (x) potential litigation relating to the
proposed transaction; and (xi) restrictions during the pendency of
the proposed transaction that may impact Avalara’s ability to
pursue certain business opportunities. Additional factors that
could cause Avalara’s actual outcomes or results to differ
materially from those described in the forward-looking statements
can be found in the “Risk Factors” sections of Avalara’s Annual
Report on Form 10-K for the period ended December 31, 2021,
Quarterly Report on Form 10-Q for the period ended March 31, 2022
and Quarterly Report on Form 10-Q for the period ended on June 30,
2022, as such factors may be further updated from time to time in
Avalara’s other filings with the SEC. These reports are or will be
accessible on the SEC’s website at www.sec.gov. These factors
should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in this press release and in Avalara’s filings with the SEC. As a
result of such risks, uncertainties and factors, Avalara’s actual
results may differ materially from any future results, performance
or achievements discussed in or implied by the forward-looking
statements contained herein. Avalara is providing the information
in this communication as of this date and assumes no obligations to
update the information included in this communication or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
_______________ 1 Permission to use quotes neither sought nor
obtained. Emphasis added.
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version on businesswire.com: https://www.businesswire.com/news/home/20220930005572/en/
For investor inquiries, contact: Jennifer Gianola
jennifer.gianola@avalara.com 650-499-9837
For media inquiries, contact: Jesse Hamlin media@avalara.com
518-281-0631
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