DEFA14A: Olo Supplements Merger Proxy Amid Shareholder Lawsuits

Olo Inc. has filed supplemental disclosures to its definitive proxy statement in response to shareholder lawsuits challenging its proposed merger with Project Hospitality Parent, an affiliate of Thoma Bravo.

Summary

• Olo Inc. (Olo) is supplementing its definitive proxy statement related to its merger with Project Hospitality Parent, LLC, an affiliate of Thoma Bravo, following shareholder litigation.
• Multiple purported Olo stockholders filed complaints in New York State courts on August 18 and 19, 2025, alleging negligent misrepresentation and omission of material information from the original proxy statement.
• The lawsuits seek, among other things, an injunction against the stockholder vote or merger closing, additional disclosures, rescission of the merger if consummated, and unspecified damages and fees.
• Olo denies the allegations and believes supplemental disclosures are not legally required but is providing them voluntarily to address the claims and avoid potential nuisance, expense, and business delays.
• The supplemental disclosures include additional details regarding the Board's discussions on fiduciary duties and potential conflicts of interest, and Goldman Sachs' financial analyses, including updated projections and valuation ranges.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the emergence of shareholder litigation challenging the merger, which introduces uncertainty, potential delays, and legal costs. While the company is taking steps to mitigate these issues, the situation is a clear negative development for the merger process.

Positives

• Olo is proactively providing supplemental disclosures to address shareholder concerns and avoid potential business delays, even while denying the legal merit of the claims.
• The Board discussed fiduciary duties and potential conflicts of interest for directors and significant stockholders (Mr. Glass, Raine, Raqtinda) early in the strategic review process, indicating a focus on corporate governance.

Negatives

• The company is facing multiple shareholder lawsuits alleging material omissions and misrepresentations in its definitive proxy statement regarding the merger.
• The lawsuits seek significant remedies, including an injunction against the merger vote or closing, which could delay or even prevent the merger's consummation.
• The litigation introduces uncertainty and potential for significant legal expenses and business disruption for Olo.

Risks

• The proposed Merger may not be completed in a timely manner or at all, which could adversely affect Olo's business and stock price.
• Failure to satisfy conditions to the Merger, including regulatory approvals, could lead to termination.
• The occurrence of any event that could give rise to the termination of the Merger Agreement, potentially requiring Olo to pay a termination fee.
• The effect of the announcement or pendency of the proposed transaction on Olo's business relationships, operating results, and general business.
• Risks that the proposed transaction disrupts Olo's current plans and operations.
• Olo's ability to retain and hire key personnel and maintain relationships with key business partners and customers during the transaction period.
• Risks related to diverting management's attention from ongoing business operations.
• Unexpected costs, charges, or expenses resulting from the proposed Merger.
• Potential litigation relating to the Merger that could be instituted against the parties, including the effects of any outcomes related thereto.
• Continued availability of capital and financing and rating agency actions.
• Certain restrictions during the pendency of the Merger that may impact Olo's ability to pursue business opportunities or strategic transactions.
• Unpredictability and severity of catastrophic events, including acts of terrorism, war, or hostilities.
• The impact of adverse general and industry-specific economic and market conditions.
• Uncertainty as to the timing of completion of the proposed Merger.
• Legislative, regulatory, and economic developments affecting Olo's business.

Future Outlook

The company's forward-looking statements indicate that actual results may differ materially from projections due to various known and unknown risks, including those related to the timely completion of the merger, regulatory approvals, potential termination fees, business disruption, retention of key personnel, management distraction, unexpected costs, and ongoing litigation. The company does not undertake to update these statements unless required by law.

Management Comments

• "The Company and the individual defendants intend to vigorously defend against the Complaints, Demands and any subsequently filed complaints or similar actions."
• "The Company believes that the allegations in the Complaints and Demands are without merit and supplemental disclosures are not required or necessary under applicable laws."
• "Nevertheless, in order to moot the disclosure claims and avoid nuisance and possible expense and business delays, the Company has determined voluntarily to supplement certain disclosures..."

Industry Context

The merger and associated litigation occur within the technology industry, where M&A activity is common, and shareholder activism or litigation challenging deal terms and disclosures is a recurring theme. The valuation analyses performed by Goldman Sachs utilize benchmarks from the broader technology sector, indicating that Olo's performance and valuation are assessed against industry peers and precedent transactions.

Comparison to Industry Standards

• Goldman Sachs' Selected Publicly Trading Companies Analysis compared Olo to publicly traded companies in the technology industry with similar operations, applying an illustrative EV/NTM uFCF reference multiple of 14.1x and an EV/NTM GP reference multiple of 5.7x.
• Goldman Sachs' Selected Precedent Transactions Analysis applied a reference range of illustrative EV/NTM FCF multiples of 16.1x to 31.1x based on comparable transactions.
• The Premia Paid Analysis reviewed 90 all-cash acquisition transactions since July 1, 2020, involving public technology companies in the United States with enterprise values over $1 billion, providing a benchmark for acquisition premia in the industry.

Corporate Governance

Legal Proceedings

• On August 18, 2025, and August 19, 2025, purported Company stockholders filed complaints (Conners v. Olo Inc., et al., No. 654927/2025; Thompson v. Olo Inc., et al., No. 161043/2025; Herzog v. Cancel, et al., No. 69023/2025) in New York State courts.
• The complaints assert claims for negligent misrepresentation and concealment and negligence in violation of New York State common law for purportedly misrepresenting and/or omitting material information from the definitive proxy statement filed on August 8, 2025.
• The Herzog complaint also asserts claims for violation of the Illinois Securities Act against Thoma Bravo, L.P., Thoma Bravo Discover Fund IV, L.P., Project Hospitality Parent, LLC, and Project Hospitality Merger Sub, Inc.
• The lawsuits generally seek an injunction enjoining the stockholder vote or closing of the merger, an order requiring additional information disclosure, rescission of the merger if consummated, costs of the action (including attorneys' and experts' fees), and/or unspecified damages and expenses.
• Olo has also received demand letters from purported stockholders seeking additional disclosures in the Definitive Proxy Statement.

Related Party Transactions

• The merger involves Project Hospitality Parent, LLC and Project Hospitality Merger Sub, Inc., which are affiliated with Thoma Bravo Discover Fund IV, L.P. and Thoma Bravo, L.P.
• The Board discussed potential conflicts of interest for significant stockholders, including Mr. Glass (CEO, director, significant stockholder), The Raine Group (Raine), and Raqtinda Investments LLC (Raqtinda), given their roles and affiliations (e.g., Brandon Gardner as Chairman of the Board and Founding Partner of Raine, Colin Neville as Board member and Partner at Raine, David Frankel as Board member and Manager of Raqtinda).
• Goodwin, Olo's legal counsel, concurrently represented Thoma Bravo on unrelated matters and may continue to do so, though no Goodwin attorneys represented Thoma Bravo in connection with the Merger.

Stakeholder Impact

• **Shareholders**: Face uncertainty regarding the merger's completion due to litigation, potential for delays, and the possibility of the merger being enjoined or rescinded. The supplemental disclosures aim to address their concerns about information adequacy.
• **Company Management and Board**: Are defendants in the lawsuits and are actively engaged in defending against the claims, diverting attention and resources.
• **Employees**: May experience uncertainty regarding the company's future ownership and strategic direction due to the ongoing merger process and litigation.
• **Thoma Bravo (Acquirer)**: Faces increased risk and potential delays in closing the acquisition due to the litigation, and is also named as a defendant in one of the complaints.

Next Steps

• The company and individual defendants intend to vigorously defend against the Complaints and Demands.
• The stockholder vote on the merger is pending, and the lawsuits seek an injunction against it or its closing.
• The company may receive additional demand letters or face other lawsuits arising from the Merger between August 28, 2025, and its consummation.

Key Dates

Recommendation

The emergence of shareholder litigation challenging the merger introduces significant uncertainty and risk to the transaction's completion. While Olo is defending vigorously and providing supplemental disclosures, the potential for delays, increased costs, or even the merger's failure warrants a 'hold' recommendation. Investors should monitor the litigation's progress and the merger's timeline closely, as the outcome could materially impact the stock's value. The current situation does not provide a clear catalyst for a 'buy' given the new risks, nor a 'sell' unless the merger's probability of success significantly diminishes.

Keywords

Olo Inc., Merger, Thoma Bravo, Shareholder Lawsuit, Proxy Statement, SEC Filing, Corporate Governance, Valuation Analysis, Financial Projections, Acquisition, Technology Industry, Litigation Risk