Unedited news and product information from vendors.
Great Hill Partners Urges Vitacost.com Shareholders to Put in Place New Directors
May 25, 2010 (03:05 PM EDT)
BOSTON, May 25 /PRNewswire/ -- Great Hill Equity Partners IV, L.P. and certain of its affiliates ("Great Hill") today commenced formal mailing of definitive materials, including a WHITE consent card, to the stockholders of Vitacost.com, Inc. (Nasdaq: VITC) ("Vitacost" or the "Company") urging shareholders to reconstitute the Vitacost board by electing Great Hill's four nominees. Great Hill is Vitacost's largest shareholder.
Great Hill said that it believes there has been significant erosion in stockholder value since the Company's initial public offering, and that a primary reason for the Company's poor performance is a Board comprised of directors with little, if any, public company or Internet, eCommerce or direct marketing experience. In this regard, Great Hill believes that its prior discussions with Vitacost's Board have not been productive and that time is of the essence.
Great Hill believes that its nominees, Christopher S. Gaffney, Mark A. Jung, Michael A. Kumin and Jeffrey M. Stibel, have the experience necessary to help the Company grow and build value, possessing over 60 years of combined experience in the Internet, eCommerce and direct marketing industries and significant executive and board level public company experience. Great Hill is confident that the experience of its nominees would provide tremendous value in addressing the performance issues facing the Company.
To help effect a Vitacost turnaround, Great Hill is asking shareholders to consent to its three proposals:
In order for its proposals to be approved, Great Hill will need to deliver to Vitacost valid consents for the proposals representing a majority of all outstanding shares as of the June 2, 2010 record date. Great Hill intends to deliver consents to Vitacost as promptly as practicable after the record date upon receipt of the requisite number of valid consents.
The full text of Great Hill's letter to the stockholders of Vitacost follows:
May 25, 2010
Dear Fellow Stockholder:
Great Hill Equity Partners IV, L.P. and certain of its affiliates ("Great Hill") are soliciting written consents from the stockholders of Vitacost.com, Inc. ("Vitacost") to reconstitute the Vitacost board by electing Great Hill's four, highly qualified nominees. We are an investment firm managing over $2.7 billion in capital, focused on investing in growth companies operating in the media and Internet, consumer and business services, logistics, transaction processing and software industries. We currently own 19.7% of Vitacost's outstanding common stock.
As major stockholders, we have commenced this consent solicitation because we believe that time is of the essence to stem the significant erosion in stockholder value that has occurred since Vitacost's initial public offering. We believe that a primary reason for this poor performance is because Vitacost's board is comprised of directors with little, if any, public company or Internet, eCommerce or direct marketing experience.
To Help Effect a Turnaround, We Are Asking You to Consent to Our Three Proposals
We believe that our nominees, Christopher S. Gaffney, Mark A. Jung, Michael A. Kumin and Jeffrey M. Stibel, have the experience necessary to help Vitacost grow and build stockholder value. Together they possess over 60 years of combined experience in the Internet, eCommerce and direct marketing industries, as well as significant experience as directors and executives in numerous public and private companies. We are confident that our nominees would provide tremendous value in addressing the troubling performance issues facing Vitacost today, including manufacturing and logistical mistakes, turnover in key management positions, poor board-level governance, and two earnings misses in the past twelve months – all leading to serious stockholder value erosion.
Our Nominees will Seek to Enhance Management Oversight, Board Effectiveness and Corporate Governance at Vitacost in Order to Enhance Operational Performance and Stockholder Value
Consider the qualifications and experience of our four nominees:
Why Vitacost Needs Better Strategic Oversight by a Highly Qualified Board
Vitacost has over-promised and under-delivered:
Vitacost has underperformed since going public:
There has been high turnover and underperformance in mission critical functions:
Board-level governance to date has been poor:
Great Hill's Nominees Have a Sound Approach to Overseeing Value Creation
Our nominees will help ensure that Vitacost's growth and expansion plans are effectively implemented by management
Leveraging their expertise, our nominees will provide management with appropriate Boardlevel input
Our nominees will redeem Vitacost's poison pill
Great Hill Is Not Seeking to Acquire Vitacost
We are subject to Delaware's "interested stockholder" statute (DGCL Section 203). This means that until March 23, 2013, we cannot acquire Vitacost without the approval of its board and twothirds of the outstanding stock which is not owned by Great Hill. These provisions are nonwaivable and we have no ability to change these restrictions.
Vitacost Can Be Righted – The Time to Act is Now
We believe that our nominees' sound and clear approach to overseeing value creation would be instrumental in putting Vitacost back on a strong growth track. This is a critical year for Vitacost, which needs an experienced board of directors capable of helping management execute on its strategic and operational plans.
Certain Information Regarding Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, Great Hill's plans to distribute a definitive consent statement, Great Hill's plans, strategies and prospects, both business and financial. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Great Hill undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
About Great Hill Partners
Great Hill Partners is an investment firm that manages over $2.7 billion in capital and focuses on investing in growth companies operating in the business and consumer services, media, transaction processing and software industries. Great Hill Equity Partners IV, L.P. and its affiliates target equity investments of $50 million to $150 million. For more information, please visit the Great Hill Partners web site at www.greathillpartners.com.
SOURCE Great Hill Equity Partners IV, L.P. and certain of its affiliates