- Special Meeting was called promptly and delayed by baseless
litigation brought by OneMove in which Engine participated as an
intervenor
- Engine's advice and demands over the past several months have
been demonstrably wrong and would have been potentially value
destructive if followed
- Engine weaponized private, good faith engagement regarding
important legal and regulatory matters to score points
TORONTO, Sept. 25,
2024 /CNW/ - Dye & Durham Limited ("Dye
& Durham" or the "Company") (TSX: DND), one of the
world's largest providers of cloud-based legal practice management
software, today responded to Engine Capital LP's (together with its
affiliates "Engine") latest attempt to advance a
rapidly-shifting and misleading narrative.
Dye & Durham wishes to set the record straight for the
benefit of all shareholders:
The Special Meeting
Engine requisitioned a special meeting of shareholders, and the
Company promptly set a meeting for August
20, 2024 (the "Special Meeting"). The Special Meeting was
then postponed by way of a court order on July 17, 2024, after OneMove Capital Ltd.
("OneMove"), another activist shareholder, commenced
baseless litigation against the Company. OneMove's litigation,
which Engine participated in as an intervenor, was
subsequently dismissed on September 17,
2024.
If not for OneMove's baseless litigation, the Special Meeting
would have occurred over a month ago. Following the dismissal
of OneMove's litigation, the Company again promptly set a new date
for the Special Meeting for December 10,
2024. The Board set the rescheduled Special Meeting date
considering several factors including: the time required to
prepare, file and mail proxy materials; minimizing the distraction
for the Board and management team as they prepare to close the
quarter and report financial results; and the overall needs of the
business.
Engine Has Been Proven Wrong at Every Turn
Engine fundamentally does not understand the Company or its
business. If the Board had acceded to Engine's demands over the
past several months, it would have been value destructive for
shareholders.
Against Engine's "advice" to not attempt a debt
refinancing, and its hyperbolic posturing, the Company refinanced
its debt on more favourable terms that materially reduced its
debt service cashflows, staggered and extended its maturities,
and saved the Company approximately CAD $20
million annualized in net interest costs. Dye & Durham
also completed two small tuck-in acquisitions, which are expected
to exceed the Company's historical returns target without adding
any funded debt. These acquisitions have created significant
opportunities for product enhancements and strengthened Dye &
Durham's competitive position.
Engine, as recently as this month, claimed that the Company's
level of debt had increased. This is patently false. Since
December 31, 2023, Dye & Durham's
net debt has decreased by approximately CAD $88 million as of June 30,
2024. The Company remains committed to further reducing both
its debt and leverage ratios—achieving this without sacrificing its
growth prospects, which would have been compromised under Engine's
advice. In addition to the Company's recent refinancing
transactions, it made a CAD $20.3
million early repayment on its term loan facility. The
early debt repayment is approximately four times the minimum annual
prepayment requirement under the terms of
the facility.
Private Engagement with the Activists on Important Regulatory
Matters
Dye & Durham and its subsidiaries operate within a complex
global regulatory framework that includes substantial government
oversight, restriction and control. The applicable regulatory
framework includes national security, foreign investment, among
other regulations.
Based on advice from independent legal counsel, there are
serious concerns that certain shareholders of the Company,
including Engine and others (collectively, 'the Activist
Shareholders'), may be in breach of the UK's National Security
& Investment Act 2021 (NSIA) and Australia's Foreign Acquisitions and Takeovers
Act 1975 (FATA).
The Company recognizes the severe legal implications for the
Activist Shareholders, including potential criminal penalties,
associated with failing to obtain necessary government approvals.
To the extent that the Activist Shareholders lack of necessary
approvals could expose Dye & Durham to knowledge-based
liabilities or offenses and given a significant portion of the
Company's revenues depends on holding certain regulatory approvals,
any noncompliance could lead to serious breaches and negatively
impact the Company's operations. Consequently, Dye & Durham
made efforts to engage privately and constructively with the
Activist Shareholders to determine their compliance with applicable
national security and foreign investment laws.
The Company is very disappointed that Engine has chosen to
mischaracterize Dye & Durham's genuine efforts to engage with
them privately regarding their compliance with various laws. The
Company's good faith attempts were aimed at understanding their
position and helping them potentially avoid serious consequences.
Instead of fostering constructive dialogue, Engine appears
focused on scoring cheap points in its relentless pursuit of
control over the Company, regardless of the implications of the
investment of all stakeholders involved. Dye & Durham
encourages the Activist Shareholders to take the steps necessary to
ensure their compliance with applicable national security and
foreign investment laws.
About Dye & Durham
Dye & Durham Limited provides premier practice management
solutions empowering legal professionals every day, delivers vital
data insights to support critical corporate and property
transactions and enables the essential payments infrastructure
trusted by government and financial institutions. The company has
operations in Canada, the
United Kingdom, Ireland, Australia and South
Africa.
Additional information can be found at www.dyedurham.com.
Forward-looking Statements
This press release may contain forward-looking information and
forward-looking statements within the meaning of applicable
securities laws, which reflects the Company's current expectations
regarding future events, including with respect to the timing and
completion of the Offer, the intentions of the Company's directors
and officers and debenture holders with respect to tendering to the
Offer, and the Company's financial outlook and business strategy,
including its debt reduction strategy and products and services. In
some cases, but not necessarily in all cases, forward-looking
statements can be identified by the use of forward looking
terminology such as "plans", "targets", "expects" or "does not
expect", "is expected", "an opportunity exists", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not
anticipate" or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances contain forward-looking statements. Forward-looking
statements are not historical facts, nor guarantees or assurances
of future performance but instead represent management's current
beliefs, expectations, estimates and projections regarding future
events and operating performance.
Specifically, statements regarding Dye & Durham's
expectations of future results, performance, prospects, the markets
in which we operate, or about any future intention with regard to
its business, acquisition strategies and debt reduction strategy
are forward-looking information. The foregoing demonstrates Dye
& Durham's objectives, which are not forecasts or estimates of
its financial position, but are based on the implementation of its
strategic goals, growth prospectus, and growth initiatives. The
forward-looking information is based on management's opinions,
estimates and assumptions, including, but not limited to: (i) Dye
& Durham's results of operations continuing as expected, (ii)
the Company continuing to effectively execute against its key
strategic growth priorities, (iii) the Company continuing to retain
and grow its existing customer base and market share, (iv) the
Company being able to take advantage of future prospects and
opportunities, and realize on synergies, including with respect of
acquisitions, (v) there being no changes in legislative or
regulatory matters that negatively impact the Company's business,
(vi) current tax laws remaining in effect and not being materially
changed, (vii) economic conditions remaining relatively stable
throughout the period, (vii) the industries Dye & Durham
operates in continuing to grow consistent with past experience,
(ix) the seasonal trends in real estate transaction volume
continuing as expected, * the Company's expectations regarding its
debt reduction strategy being met and * those assumptions
described under the heading "Caution Regarding Forward-Looking
Information" in the Company's Management's Discussion and Analysis
for the period ended June 30, 2024.
While these opinions, estimates and assumptions are considered by
Dye & Durham to be appropriate and reasonable in the
circumstances as of the date of this press release, they are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, levels of
activity, performance, or achievements to be materially different
from those expressed or implied by such forward-looking
information.
The forward looking information is subject to significant risks
including, without limitation: that the Company will be unable to
effectively execute against its key strategic growth priorities,
including in respect of acquisitions; the Company will be unable to
continue to retain and grow its existing customer base and market
share; risks related to the Company's business and financial
position; that Dye & Durham may not be able to accurately
predict its rate of growth and profitability; risks related to
economic and political uncertainty; income tax related risks; and
those risk factors discussed in greater detail under the "Risk
Factors" section of the Company's most recent annual information
form and under the heading "Risks and Uncertainties" in the
Company's most recent Management's Discussion and Analysis, which
are available under Dye & Durham's profile on SEDAR+ at
www.sedarplus.ca. Many of these risks are beyond the
Company's control.
If any of these risks or uncertainties materialize, or if the
opinions, estimates or assumptions underlying the forward-looking
information prove incorrect, actual results or future events might
vary materially from those anticipated in the forward-looking
information. Although the Company has attempted to identify
important risk factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other risk factors not presently known to the Company
or that the Company presently believes are not material that could
also cause actual results or future events to differ materially
from those expressed in such forward-looking information.
Although the Company bases these forward-looking statements on
assumptions that it believes are reasonable when made, the Company
cautions investors that forward-looking statements are not
guarantees of future performance and that its actual results of
operations, financial condition and liquidity and the development
of the industry in which it operates may differ materially from
those made in or suggested by the forward-looking statements
contained in this press release. In addition, even if the Company's
results of operations, financial condition and liquidity and the
development of the industry in which it operates are consistent
with the forward-looking statements contained in this press
release, those results of developments may not be indicative of
results or developments in subsequent periods.
There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such information. No
forward-looking statement is a guarantee of future results.
Accordingly, you should not place undue reliance on forward-looking
information, which speaks only as of the date made. The
forward-looking information contained in this press release
represents Dye & Durham's expectations as of the date specified
herein, and are subject to change after such date. However, the
Company disclaims any intention or obligation or undertaking to
update or revise any forward-looking information or to publicly
announce the results of any revisions to any of those statements,
whether as a result of new information, future events or otherwise,
except as required under applicable securities laws. Comparisons of
results for current and any prior periods are not intended to
express any future trends or indications of future performance,
unless specifically expressed as such, and should only be viewed as
historical data.
All of the forward-looking information contained in this press
release is expressly qualified by the foregoing cautionary
statements.
SOURCE Dye & Durham Limited