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Purple Responds to Coliseum Capital Board Nomination Announcement
February 15,
2023 by HFBusiness Staff in Business Strategy, Industry 
Purple Innovation, Inc., known for creating the "World's First No Pressure Mattress," responded to the announcement by Coliseum Capital Management, LLC, a 45% shareholder of its intention to nominate five directors for election to Purple’s Board of Directors at the Company’s 2023 annual meeting.
The Special Committee of the Board of Directors made the following statement:
We are extremely disappointed that Coliseum has launched a proxy fight seeking to replace a majority of Purple’s Board, which currently comprises seven members.
Coliseum’s Managing Partner Adam Gray has served on Purple’s Board of Directors since the time the Company went public in 2018. He has been the Chairman of the Board’s Nomination & Governance Committee (N&G Committee) since its formation.
During this time, Mr. Gray has been a fully engaged director, regularly contributing to Board composition and management succession planning, developing long-term growth strategies, and determining the appropriate capital structure to support the Company’s promising future.
At no time did Mr. Gray express his discontent with the way the business is being managed or the Company’s strategic direction. He appears content with management, and he has been the director most responsible for the Board’s composition, given his role as Chairman of the N&G Committee.
Mr. Gray’s posture only changed in January when the Company rejected Coliseum Capital’s undervalued buyout proposal of $4.35 per share. Notably, Purple’s stock has closed over that price for the past 75 days. Only in January, after the Company turned down Coliseum’s opportunistic proposal, has Coliseum leveled criticisms and initiated the process to replace the majority of the Board with individuals of Coliseum’s choosing.
Mr. Gray and Coliseum have chosen to ignore the ongoing Board refreshment process that Mr. Gray, as Chair of the Board’s N&G Committee, was responsible for managing. Inexplicably, none of Coliseum’s new nominees were previously submitted by Mr. Gray for consideration to the independent search firm hired in the Fall by the N&G Committee.
Furthermore, it appears that each of those candidates has past or current business relationships with Coliseum, which may affect their ability to act independently of Coliseum and on behalf of all Purple shareholders.
As Coliseum notes in its letter, Purple has an opportunity to unlock substantial shareholder value. The current Board has recruited an exceptional management team, led by Rob DeMartini, that is executing a clearly defined strategic and operational plan.
It is unfortunate that as we approach the sixth month of Coliseum’s efforts to gain control of Purple without paying shareholders a suitable premium, Coliseum’s campaign continues to be a distraction for this outstanding team and our employees.
We remain interested in working cooperatively with Coliseum, and we will continue to seek to do so while protecting the interests of all shareholders. The Special Committee will review and consider Coliseum’s nomination notice in accordance with the Company’s bylaws and applicable law.
The Board will present its recommendations for director nominees in its proxy statement that will be filed with the U.S. Securities and Exchange Commission. Purple shareholders are not required to take any action at this time.
Spotlight Advisors LLC is serving as strategic advisor and Sidley Austin LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as legal advisors to the Special Committee.