Covisint Corporation (Nasdaq:COVS), the leading Cloud Platform for building Identity and Internet of Things (IoT) applications, today announced that it has entered into an agreement with Dialectic Capital Management, LP and its affiliates, which, in the aggregate, beneficially owns approximately 6.2% of Covisint’s outstanding shares, regarding the composition of Covisint’s Board of Directors. Under the terms of the agreement, Covisint has agreed to appoint to its Board, and support the re-election of, three new independent directors, Andreas Mai, John F. Smith and Jonathan Yaron. Covisint also announced today that, upon joining the Covisint Board, Mr. Smith will become the Covisint Board’s non-executive Chairman.
The three new independent directors will join the Covisint Board, effective immediately, and will be included, together with incumbent directors Sam Inman, Barry Goldsmith, Bill Grabe and Dave Hansen, in Covisint’s 2016 proxy statement and will be voted upon by shareholders at the 2016 annual meeting of shareholders of Covisint. Homaira Akbari, a current member of the Covisint Board, has chosen to step down from the Covisint Board to focus on other business endeavors. In addition, Philip Lay, who currently serves as Covisint’s lead independent director, is retiring from the Covisint Board following the conclusion of the 2016 annual meeting. Accordingly, the Covisint Board will be temporarily increased to nine directors but will be reduced to eight directors upon Ms. Akbari’s resignation and, thereafter, will be reduced to seven directors immediately following the conclusion of the 2016 annual meeting as only seven directors are being elected at the meeting.
Philip Lay, Covisint’s lead independent director, stated, “Dialectic Capital has been very supportive and cooperative in this process. I am pleased that, by constructively engaging and collaborating with our shareholders, we have found three very impressive new additional directors for our Board, each bringing substantive skills and experiences to support our success in the automotive sector and our strategic partner strategy. All three new independent directors will complement the strengths of the current members of our Board and enhance management’s ability to drive the execution of its various initiatives for creating shareholder value. We are pleased to welcome our newest independent directors to the Covisint Board and look forward to the insights and experience that they will bring to the Board as we work together to enhance value for all Covisint shareholders.”
John Fichthorn, speaking on behalf of Dialectic Capital Management, said, “We are pleased to have worked collaboratively with the Covisint Board and senior management team to reach this agreement which we believe is a good outcome for all shareholders. Our recent conversations with Covisint’s Board and senior management team have been constructive and encouraging. We are hopeful that the constructive engagement and open and good faith dialogue that resulted in the addition of three new independent directors to the Board will continue and will facilitate further open and transparent communications between the Company and its shareholders. We believe the addition of the three new independent directors, alongside Covisint’s management team and the other Board members, will be instrumental in helping Covisint further develop and refine its strategic growth plan and identify and execute upon opportunities to unlock the significant value that we believe remains trapped in Covisint’s undervalued share price.”
Under the terms of the agreement, Dialectic Capital Management and its affiliates have agreed to vote their shares in support of, among other things, the election of Covisint’s slate of recommended directors, which includes the three new independent directors, at the 2016 annual meeting and to abide by certain other voting and standstill provisions.
The complete agreement between Covisint and Dialectic Capital and its affiliates will be filed as an exhibit to a Current Report on Form 8-K with the Securities and Exchange Commission.
Morgan, Lewis & Bockius LLP served as legal advisor to Covisint. Olshan Frome Wolosky LLP served as legal advisor to Dialectic Capital Management, LP.
