Arlo Technologies, Inc. (NYSE: ARLO), the #1 internet connected camera brand in the U.S.,1 today announced that it has entered into a cooperation agreement with VIEX Capital Advisors, LLC and certain of its affiliates (collectively, VIEX), which owns approximately 9.7% of the outstanding shares of Arlos common stock.
Under the terms of the cooperation agreement, Arlo has agreed to increase the size of its board of directors from six to seven and to appoint an independent director recommended by VIEX to fill the vacancy created as a result of such expansion. The new director will be appointed as a Class II director, with a term expiring at Arlos 2020 annual meeting of stockholders, within the next five business days.
The Arlo board of directors has also approved commencing a comprehensive strategic review, with the purpose of evaluating a wide range of strategic alternatives available to Arlo to optimize the value of Arlo and to improve returns to its stockholders. The Board has engaged Deutsche Bank Securities Inc. in connection with the strategic review. The cooperation agreement provides that, as part of the strategic review, Arlo will form a special committee of the board which will include the new director and oversee the review process. The board has also agreed to reduce its compensation in order to better align with stockholders.
Matthew McRae, Chief Executive Officer of Arlo, stated, The board is laser focused on improving Arlos business and maximizing value for all shareholders. This announcement and settlement agreement demonstrate our commitment to that focus. We look forward to working with our new director whose skills compliment the current board as we focus on our dual path of executing against our operational objectives and pursuing strategic alternatives. We appreciate the constructive dialogue we have had with VIEX and are pleased to have reached this agreement with them.
Eric Singer, the Founder and Managing Member of VIEX, said This settlement and the boards actions show alignment with shareholders, and the establishment of a strategic committee in conjunction with a banker is an important step to maximize shareholder value. We were pleased to have reached this agreement today that aligns with stockholders and explores all options to maximize value.
Under the terms of the cooperation agreement, VIEX has agreed, among other things, to customary standstill provisions and to vote its shares in support of the election of Arlos director candidates at the 2019 annual meeting of stockholders, subject to certain exceptions.
The board has not set a timetable for the conclusion of its review of strategic alternatives. Arlo does not intend to comment further on the strategic review process unless and until the board has approved a specific course of action or Arlo has otherwise determined that further disclosure is appropriate or required by law. There can be no assurance on the outcome or results of the review of strategic alternatives.
The complete agreement between Arlo and VIEX will be filed as an exhibit to a Current Report on Form 8-K with the Securities and Exchange Commission.
About Arlo Technologies, Inc.
Arlo is the award-winning, industry leader that is transforming the way people experience the connected lifestyle. Arlo’s deep expertise in product design, wireless connectivity, cloud infrastructure and cutting-edge AI capabilities focuses on delivering a seamless, smart home experience for Arlo users that is easy to setup and interact with every day. The company’s cloud-based platform provides users with visibility, insight and a powerful means to help protect and connect in real-time with the people and things that matter most, from any location with a Wi-Fi or a cellular connection. To date, Arlo has launched several categories of award-winning smart connected devices, including wire-free smart Wi-Fi and LTE-enabled cameras, advanced baby monitors and smart security lights.
Arlo Technologies, Inc., Arlo and the Arlo logo are trademarks and/or registered trademarks of Arlo Technologies, Inc. and/or certain of its affiliates in the United States and/or other countries. Other brand and product names are for identification purposes only and may be trademarks or registered trademarks of their respective holder(s). The information contained herein is subject to change without notice. Arlo shall not be liable for technical or editorial errors or omissions contained herein. All rights reserved.
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,” “estimate,” “project,” “outlook,” “forecast” or other similar words are used to identify such forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. The forward-looking statements represent Arlo Technologies, Inc.’s expectations or beliefs concerning future events based on information available at the time such statements were made and include statements regarding the appointment of a new director and the outcome of a strategic review process. These statements are based on management’s current expectations and are subject to certain risks and uncertainties, including the following: future demand for the Company’s products may be lower than anticipated; consumers may choose not to adopt the Company’s new product offerings or adopt competing products; and product performance may be adversely affected by real world operating conditions. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Further information on potential risk factors that could affect Arlo and its business are detailed in the Company’s periodic filings with the Securities and Exchange Commission, including, but not limited to, those risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Given these circumstances, you should not place undue reliance on these forward-looking statements. Arlo undertakes no obligation to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
1 The NPD Group, Inc., U.S. Retail Tracking Service, Security & Monitoring, Camera Technology: Decentralized IP Camera and Centralized IP Camera, based on Dollars, Jan 2018-Dec 2018
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