DEFA14A: CBIZ Addresses Shareholder Lawsuits with Supplemental Proxy Disclosures Regarding Marcum LLP Merger

CBIZ supplements its proxy statement to address shareholder lawsuits alleging disclosure deficiencies related to the proposed merger with Marcum LLP.

Summary

• CBIZ, Inc. is supplementing its definitive proxy statement related to the proposed merger with Marcum LLP following complaints and demand letters from shareholders.
• The shareholders allege disclosure deficiencies in the original proxy statement.
• To avoid further legal expenses and delays, CBIZ is voluntarily providing additional disclosures, while maintaining that the original disclosures were compliant with applicable law.
• The supplemental disclosures include revisions to the financial advisor's opinion and the projected financial information for Marcum.
• Specifically, the revisions update the selected publicly traded company comparison table and provide further detail on Perella Weinberg's financial analysis.
• The company believes the allegations are without merit, but additional complaints may be filed and additional demand letters may be received based on similar or other allegations.
• The updated forecasts include both non-synergized and synergized scenarios for Marcum's revenue, Adjusted EBITDA, and free cash flow from 2024E to 2029E.
• The company has included the summary information set forth below, which the Company believes includes all material elements of the Forecasts, to give the Company's shareholders access to this previously non-public information because such information was considered by the Board for purposes of evaluating the Transaction and by Perella Weinberg for purposes of its financial analyses and opinion.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While the company is facing legal challenges, it is proactively addressing them. The supplemental disclosures provide more information to shareholders, but the underlying issue of disclosure deficiencies remains a concern.

Positives

• CBIZ is proactively addressing shareholder concerns by providing supplemental disclosures.
• The company is aiming to avoid further legal expenses and delays by supplementing the proxy statement.
• The supplemental information provides shareholders with additional details regarding the financial advisor's opinion and projected financial information for Marcum.
• The company believes the allegations are without merit, but additional complaints may be filed and additional demand letters may be received based on similar or other allegations.

Negatives

• Shareholder lawsuits and demand letters indicate concerns about the adequacy of the initial disclosures.
• Defending against these claims and threats of these claims can result in substantial costs and divert management time and resources.
• The company believes the allegations are without merit, but additional complaints may be filed and additional demand letters may be received based on similar or other allegations.

Risks

• Additional complaints may be filed and additional demand letters may be received based on similar or other allegations.
• Litigation is inherently uncertain and could result in monetary damages or injunctive relief.
• The transaction could be delayed or prevented due to legal challenges.
• The possibility that anticipated benefits and/or synergies of the Transaction will not be achieved in a timely manner or at all.
• The possibility that the costs of the Transaction and/or liabilities assumed will be more significant than anticipated.
• The possibility that integration will prove more costly and/or time consuming than anticipated.
• The possibility that the Transaction could disrupt ongoing plans and operations of the parties or their respective relationships with clients, other business partners and employees.
• The possibility that the financing will not be obtained as anticipated and the effects of the increased leverage of the Company following the Transaction.

Future Outlook

The document includes forward-looking statements regarding the anticipated future operating results of Marcum, including revenue, Adjusted EBITDA, and free cash flow. These statements are subject to risks and uncertainties, and actual results may differ materially.

Management Comments

• The Company believes that the Matters are without merit.
• The Company denies all allegations in the Matters and disagrees that any additional disclosure was or is required in the Proxy Statement.

Industry Context

The document references publicly traded companies used for comparison in the financial advisor's analysis, including FTI Consulting, CRA International, and Huron Consulting Group. This suggests that CBIZ operates in the consulting and business services industry.

Comparison to Industry Standards

• The document compares CBIZ's Enterprise Value/EBITDA and Share Price/Earnings per Share multiples to those of selected publicly traded companies like FTI Consulting, CRA International, ICF International, Huron Consulting Group, Robert Half, The Hackett Group, and H&R Block.
• The mean and median multiples for these companies are provided for both 2024E and 2025E, offering a benchmark for CBIZ's valuation in the context of the merger.
• For example, the median Enterprise Value/2024EEBITDA for the selected companies is 14.8x, while CBIZ's is 19.2x.

Legal Proceedings

• Finger v. CBIZ, Inc. et. al., Index No. 655186-24 (Sup. Ct. N.Y. Cnty. 2024).
• Coffman v. CBIZ, Inc. et. al., Index No. 655229-24 (Sup. Ct. N.Y. Cnty. 2024).

Stakeholder Impact

• Shareholders are impacted by the potential merger and the legal challenges surrounding it.
• Employees of both CBIZ and Marcum may be affected by the integration of the two companies.
• Clients of both CBIZ and Marcum may experience changes in service offerings and relationships.

Next Steps

• The Company's shareholders need to approve the stock issuance proposal.
• The parties need to consummate the Transaction in a timely manner.
• The Company needs to defend against any litigation related to the Transaction.

Key Dates

Keywords

Merger, CBIZ, Marcum, Proxy Statement, Shareholder Lawsuit, Disclosure, Financial Advisor, Adjusted EBITDA, Forecasts, Litigation