UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.
)
Filed by the Registrant
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Filed by a
Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement.
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Confidential, for use of the Commission only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement.
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Definitive Additional Materials.
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Soliciting Material Pursuant to § 240.14a-12.
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INTERWOVEN, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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3)
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
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4)
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Proposed maximum aggregate value of transaction:
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5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the form or schedule and the date of
its filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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3)
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Filing Party:
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Date Filed:
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As previously disclosed in the definitive proxy statement filed by Interwoven, Inc., a Delaware
corporation (Interwoven or the Company), with the Securities and Exchange Commission on
February 9, 2009, two putative class action lawsuits were filed in the Court of Chancery of the
State of Delaware (the Court) against Interwoven, its directors, Autonomy Corporation plc
(Autonomy) and a wholly-owned subsidiary of Autonomy, and a motion for preliminary injunction
seeking to enjoin the vote of Interwovens stockholders and Interwovens merger with a wholly-owned
subsidiary of Autonomy was also filed. Following the distribution of the definitive proxy statement
to Interwovens stockholders, the defendants were named in two additional putative class action
lawsuits, alleging claims similar to the first two putative class action lawsuits. On February 24,
2009, the court entered an order consolidating all of those putative class action lawsuits under
the heading
In re Interwoven, Inc. Shareholders Litigation
(Consolidated Civil Action No. 4362-VCL)
(the Shareholders Litigation), and appointed lead plaintiffs and lead plaintiffs counsel.
On February 26, 2009, the lead plaintiffs in the Shareholders Litigation filed a consolidated
amended class action complaint (the Amended Complaint) against the defendants. The Amended
Complaint alleges claims similar to claims alleged in each of the putative class actions previously
filed. The Amended Complaint seeks, among other things, injunctive relief, and the plaintiffs have
moved forward with the above-described motion for preliminary injunctive relief. The Court
scheduled a hearing on plaintiffs motion for March 10, 2009.
On
March 2, 2009, Interwoven reached an agreement in principle with the plaintiffs regarding the
settlement of the Shareholders Litigation. In connection with the settlement contemplated by that
agreement in principle, the lawsuits and all claims asserted therein will be dismissed and the
pending preliminary injunction motion will be withdrawn. As part of the settlement, the defendants
deny all allegations of wrongdoing. The terms of the settlement contemplated by that agreement in
principle require that Interwoven make certain additional disclosures related to the proposed
merger, which are contained in this additional soliciting material. The parties also agreed that
plaintiffs may seek attorneys fees and costs up to and including the amount of $375,000, if such
fees and costs are approved by the Court. There will be no other payment in connection with the
proposed settlement. The agreement in principle further contemplates that the parties will enter
into a stipulation of settlement, which will be subject to customary conditions, including Court
approval following notice to Interwovens stockholders. In the event that the parties enter into a
stipulation of settlement, a hearing will be scheduled at which the Court will consider the
fairness, reasonableness and adequacy of the settlement. There can be no assurance that the parties
will ultimately enter into a stipulation of settlement, that the Court will approve any proposed
settlement, or that any eventual settlement will be under the same terms as those contemplated by
the agreement in principle. If finally approved by the Court, the settlement will resolve all of
the claims that were or could have been brought by or on behalf of the proposed settlement class in
the actions being settled, including all claims relating to the proposed merger and any disclosure
made in connection with the proposed merger.
In connection with the foregoing, please find the following amended and supplemental disclosures
relating to the definitive proxy statement (the Proxy Statement), dated February 9, 2009,
relating to a Special Meeting of Stockholders of Interwoven to be held on March 11, 2009.
Opinion of Interwovens Financial Advisor
Credit Suisse Securities (USA) LLC
Discounted Cash Flow Analysis
This disclosure amends the discussion at pages 31 and 32 of the Proxy Statement
.
The last line of page 31 of the Proxy Statement contains an inadvertent reference to terminal year
net operating profit after taxes. This reference should instead refer to (and the Proxy Statement
is hereby amended to refer to) terminal year EBITDA. The first line of page 32 of the Proxy
Statement contains an inadvertent reference to NTM net operating profit after taxes. This
reference should instead refer to (and the Proxy Statement is hereby amended to refer to) NTM
EBITDA.
Selected Companies Analysis
The discussion on pages 30 and 31 of the Proxy Statement is hereby supplemented to include the
multiples of the aggregate market values of the selected companies to their calendar year 2009
estimated revenues, their calendar year 2009 estimated earnings before interest, taxes,
depreciation and amortization (EBITDA), and the multiples of the stock prices of the selected
companies to their calendar year 2009 earnings per share. The summary of this analysis is restated
below to include the aforementioned multiples:
Credit Suisse reviewed financial and stock market information of Interwoven and of three selected
publicly traded companies in the enterprise content management industry. Credit Suisse reviewed,
among other things, trading statistics and per share stock prices of the selected companies as a
multiple of their calendar year 2008 estimated earnings per share and their calendar year 2009
estimated earnings per share. Credit Suisse also reviewed the aggregate market values
(fully-diluted equity values plus all indebtedness minus cash) of the selected companies as a
multiple of their calendar year 2008 estimated revenues and their calendar year 2009 estimated
revenues and as a multiple of their calendar year 2008 estimated EBITDA, their calendar year 2009
estimated EBITDA and their estimated next twelve months (NTM) EBITDA. All statistics related to
the selected companies that were reviewed by Credit Suisse in connection with its analysis were
based on closing stock prices on January 20, 2009 and research analysts estimates. Credit Suisse
also reviewed certain operating statistics of the selected companies, including revenue, revenue
growth, EBITDA margin and long-term growth rates. Results of certain of these analyses are set
forth below:
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Aggregate Value/2009
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Aggregate Value/2009
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Price/2009 Earnings per
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Company
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Revenue
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EBITDA
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Share
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Open Text
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2.1x
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7.9x
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11.9x
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Epiq Systems
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3.0x
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9.7x
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22.6x
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Vignette
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0.2x
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8.3x
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NM*
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Interwoven (offer
price)
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2.3x
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10.8x
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21.4x
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* Not meaningful
Although none of the selected companies is directly comparable to Interwoven, the companies
included were chosen because they are publicly traded companies with operations that for purposes
of analysis may be considered similar to certain operations of Interwoven.
Credit Suisse applied a range of selected multiples derived from the selected companies
analysis to revenue, EBITDA and earnings per share data of Interwoven, using the estimates of
Interwovens management for 2009, in order to derive implied estimated per share equity reference
ranges.
This analysis indicated the following implied per share equity reference range for
Interwovens common stock, as compared to the merger consideration:
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Implied per Share Equity Reference Range for Interwoven
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Per Share Consideration in Merger
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$11.37 - $17.07
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$16.20
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Selected Transactions Analysis
The discussion on page 31 of the Proxy Statement is hereby supplemented to include the multiples of
the fully diluted aggregate value of each target company to that target companys revenue and
EBITDA, and price to earnings per share ratios for these transactions, as well as the range of
multiples applied by Credit Suisse to Interwovens revenue, EBITDA and earnings per share. The
summary of this analysis is restated below to include the aforementioned multiples and ratios:
Credit Suisse reviewed publicly available information and data for the following twelve selected
transactions announced since November 1, 2005. Credit Suisse compared the fully diluted aggregate
value of each target company as a multiple of that target companys revenue and EBITDA, and the
price to earnings per share ratio, on both a last twelve months (LTM) and NTM basis. All
statistics related to the selected transactions that were reviewed by Credit Suisse in connection
with its analysis were based on publicly available financial information at the time of
announcement of the relevant transaction. Results of certain of these analyses are set forth
below:
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Multiples of Fully Diluted Aggregate
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Transaction Value to:
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LTM
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NTM
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LTM
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NTM
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LTM
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NTM
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Target
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Acquiror
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Revenue
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Revenue
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EBITDA
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EBITDA
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P/E
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P/E
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Captaris, Inc.
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Open Text
Corporation
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1.0
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x
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0.8
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NM
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*
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17.8
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NM
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NM
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i2 Technologies,
Inc.
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JDA Software Group,
Inc.
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1.3
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1.4
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7.6x
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13.1
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21.2x
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19.1x
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Optio Software, Inc.
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Bottomline
Technologies, Inc.
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1.4
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NA
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**
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NM
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NA
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NM
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NA
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Document Sciences
Corporation
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EMC Corporation
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2.1
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NA
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NM
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NA
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NM
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NA
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Optimost LLC
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Interwoven, Inc.
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7.5
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3.7
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NA
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NA
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NA
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NA
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Zantaz, Inc.
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Autonomy
Corporation plc
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3.8
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NA
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56.8
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NA
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NA
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NA
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Mobius Management
Systems, Inc.
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Allen Systems
Group, Inc.
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1.8
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1.7
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NM
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NM
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55.8
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NM
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DocuCorp
International, Inc.
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Skywire Software,
LLC
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1.4
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1.3
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10.5
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NA
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28.6
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22.2
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Stellent, Inc.
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Oracle Corporation
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2.8
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2.4
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NA
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NA
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29.3
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21.8
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FileNet Corporation
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International
Business Machines
Corp.
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2.6
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2.5
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16.9
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15.5
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31.5
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28.7
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Hummingbird Ltd.
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Open Text
Corporation
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1.6
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1.5
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11.6
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9.3
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20.5
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18.2
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Verity, Inc.
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Autonomy Corporation plc
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2.2
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2.1
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19.0
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12.9
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45.0
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31.4
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*
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Not meaningful
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**
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Not applicable
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While none of the companies that participated in the selected transactions is directly comparable
to Interwoven, the companies that participated in the selected transactions are companies with
operations that, for the purposes of analysis, may be considered similar to certain of Interwovens
results, market size and product profile.
Credit Suisse then applied its judgment to determine the ranges of these multiples that it deemed
relevant to the merger, identifying a range of multiples of aggregate value to LTM revenues of 1.6x
2.8x, a range of multiples of aggregate value to NTM revenues of 1.5x 2.5x, a range of
multiples of aggregate value to LTM EBITDA of 11.0x 17.0x, a range of multiples of aggregate
value to NTM EBITDA of 9.0x 15.0x, a range of price to LTM earnings per share ratios of 20.0x
30.0x, and a range of price to NTM earnings per share ratios of 18.0x 29.0x. Credit Suisse then
applied these ranges of selected multiples derived from the selected transactions to LTM and NTM
revenues, EBITDA and earnings per share data of Interwoven, using actual results for LTM revenues,
EBITDA and earnings per share and the estimates of Interwovens management for NTM revenues, EBITDA
and earnings per share, in order to derive implied estimated per share equity reference ranges for
Interwoven. This analysis indicated the following implied per share equity reference range for
Interwovens common stock, as compared to the merger consideration:
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Implied per Share Equity Reference Range for Interwoven
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Per Share Consideration in Merger
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$12.01 - $22.41
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$16.20
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The foregoing summaries are subject to the limitations, qualifications and assumptions described in
the Proxy Statement.
Miscellaneous
This disclosure supplements the discussion on page 32 of the Proxy Statement.
Pursuant to the engagement agreement between Interwoven and Credit Suisse, Interwoven has agreed to
pay Credit Suisse a fee of $1.4 million, upon rendering its opinion to the Board of Directors,
which fee is not contingent on the consummation of the merger. In addition, Interwoven also agreed
to reimburse Credit Suisse for expenses resulting from or arising out of its engagement, including
the fees and expenses of Credit Suisses outside legal counsel, and to indemnify Credit Suisse and
related parties against certain liabilities and other items arising out of Credit Suisses
engagement.
Interests of Our Directors and Executive Officers in the Merger
This disclosure supplements the discussion on pages 33 and 34 of the Proxy Statement.
Except for existing agreements between Interwoven and its executive officers and directors, all of
which have been previously disclosed, Interwoven hereby supplementally confirms that none of its
executive officers or directors are parties to any agreements or arrangements providing for their
continued employment following the merger.