UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT UNDER
SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934
ARC Document Solutions, Inc.
(Name of the Issuer)
ARC Document Solutions, Inc.
TechPrint Holdings, LLC
TechPrint Merger Sub, Inc.
Kumarakulasingam Suriyakumar
Dilantha Wijesuriya
Jorge Avalos
Rahul Roy
Sujeewa Sean Pathiratne
Shiyulli Suriyakumar 2013 Irrevocable Trust
Seiyonne Suriyakumar 2013 Irrevocable Trust
Suriyakumar Family Trust
(Names of Persons Filing Statement)
Common Stock, Par Value $0.001 per share
(Title of Class of Securities)
Common Stock: 00191G103
(CUSIP Number of Class of Securities)
|
ARC Document Solutions, Inc.
12657 Alcosta Blvd, Suite 200
San Ramon, CA 94583
Tel: (925) 949-5100
|
Kumarakulasingam Suriyakumar
Dilantha Wijesuriya
Jorge Avalos
Rahul Roy
c/o ARC Document Solutions, Inc.
12657 Alcosta Blvd, Suite 200
San Ramon, CA 94583
Tel: (925) 949-5100
TechPrint Holdings, LLC
TechPrint Merger Sub, Inc.
Shiyulli Suriyakumar 2013 Irrevocable Trust
Seiyonne Suriyakumar 2013 Irrevocable Trust
Suriyakumar Family Trust
c/o TechPrint Holdings, LLC
12657 Alcosta Blvd., Suite 200
San Ramon, California 94583
Tel: (925) 949-5100
|
Sujeewa Sean Pathiratne
5727 Poppy Hills Place
San Jose, CA 94583
Tel: (925) 949-5100
|
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Persons Filing Statement)
With copies to
|
Glenn Luinenburg
Eric Hanson
Ryan S. Brewer
Wilmer Cutler Pickering Hale and Dorr LLP
2600 El Camino Real, Suite 400
Palo Alto, CA 94306
Tel: (650) 858-6000
|
Sean M. Jones
Coleman Wombwell
K&L Gates LLP
300 S. Tryon Street, Suite 1000
Charlotte, North Carolina 28202
Tel: (704) 331-7400
|
Terrence Allen, Esq.
Angela M. Dowd, Esq.
Janeane Ferrari, Esq.
Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Tel: (212) 407-4000
|
| This statement is filed in connection with (check the appropriate box): |
| a. |
☒ |
The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the Securities Exchange Act of 1934. |
| b. |
☐ |
The filing of a registration statement under the Securities Act of
1933. |
| c. |
☐ |
A tender offer. |
| d. |
☐ |
None of the above. |
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: ☒
Check the following box if the filing is a final amendment reporting the
results of the transaction: ☐
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of this transaction, passed upon the merits or fairness of this transaction, or passed upon the adequacy or accuracy of the disclosure in this transaction statement on Schedule 13E-3. Any representation to the
contrary is a criminal offense.
INTRODUCTION
This Rule 13e-3 Transaction Statement on Schedule 13E-3, together with the
exhibits hereto (this “Schedule 13E-3” or “Transaction Statement”), is being filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated thereunder, the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (i) ARC Document Solutions, Inc. (“ARC”
or the “Company”), a Delaware corporation and the issuer of the common stock, par value $0.001 per share (the “ARC Common Stock”), that is subject to the Rule 13e-3 transaction, (ii) TechPrint Holdings, LLC, a Delaware limited liability
company (“Parent”), (iii) TechPrint Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), (iv) Kumarakulasingam Suriyakumar, (v) Dilantha Wijesuriya, (vi) Jorge Avalos, (vii) Rahul Roy, (viii)
Sujeewa Sean Pathiratne, (ix) Shiyulli Suriyakumar 2013 Irrevocable Trust, (x) Seiyonne Suriyakumar 2013 Irrevocable Trust, and (xi) Suriyakumar Family Trust (together with Filing Persons (iv) through (x), the “Acquisition Group”).
On August 27, 2024, the Company, Parent and Merger Sub entered into an
Agreement and Plan of Merger (as subsequently amended on September 10, 2024) (as amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of
certain conditions and on the terms set forth therein, pursuant to which Merger Sub will merge with and into ARC with ARC surviving the merger as the surviving corporation (the “Surviving Corporation”) and a wholly-owned subsidiary of Parent
(the “Merger”). Concurrently with the filing of this Transaction Statement, the Company is filing with the SEC its preliminary Proxy Statement (the “Proxy Statement”) under Regulation 14A of the Exchange Act, relating to a special
meeting of the stockholders of the Company (the “Special Meeting”) at which the stockholders of the Company will consider and vote upon a proposal to (i) approve and adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger, (ii) approve, by nonbinding, advisory vote, certain compensation arrangements for ARC’s named executive officers in connection with the Merger and (iii) a proposal to adjourn the Special Meeting, if necessary or appropriate,
including adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement. The adoption of the Merger Agreement will require the affirmative vote of the holders of a majority
of the outstanding shares of ARC Common Stock entitled to vote, outstanding as of the close of business on the record date for the Special Meeting. A copy of the Proxy Statement is attached hereto as Exhibit (a)(2)(i) and incorporated herein by
reference. A copy of the agreement and plan of merger and the amendment thereto are attached hereto as Exhibits (d)(i) and (d)(ii), respectively, and are included as Annex A to the Proxy Statement and incorporated herein by reference.
Under the terms of the Merger Agreement, and subject to the conditions
thereof, at the effective time of the Merger (the “Effective Time”), among other things, each share of ARC Common Stock outstanding immediately prior to the Effective Time, other than as provided below, will be converted into the right to
receive $3.40 in cash (the “Merger Consideration”), without interest and less any applicable withholding taxes. The following shares of ARC Common Stock will not be converted into the right to receive the Merger Consideration in connection
with the Merger: (i) shares of ARC Common Stock held by Merger Sub or the Company or its subsidiaries as treasury stock or otherwise, (ii) shares ARC Common Stock owned by Parent immediately prior to the Effective Time of the Merger, (iii) shares of
ARC Common Stock held by members of the Acquisition Group to be contributed to Parent immediately prior to the Effective Time in exchange for common units of Parent pursuant to the rollover agreement, dated as of August 27, 2024 (as subsequently
amended on September 10, 2024), by and among Parent and the members of the Acquisition Group (such agreement, as amended, restated, supplemented or otherwise modified from time to time, the “Rollover Agreement” and such shares, the “Rollover
Shares”) and (iv) shares of ARC Common Stock that are issued and outstanding immediately prior to the Effective Time (other than Rollover Shares) and that have not been voted in favor of the adoption of the Merger Agreement or consented thereto
in writing, whose holders are entitled to demand appraisal rights with respect to such shares of ARC Common Stock, and whose holders have properly exercised and validly perfected appraisal rights with respect to such shares of ARC Common Stock in
accordance with, and who have complied in all respects with, and have not effectively withdrawn, failed to perfect, or otherwise lost such holder’s rights to appraisal with respect to such shares of ARC Common Stock, in each case, Section 262 of the
General Corporation Law of the State of Delaware (the “DGCL”), a copy of which is attached hereto as Exhibit (f) and is also included as Annex G to the Proxy Statement and incorporated herein by reference. A copy of the rollover agreement and
the amendment thereto are attached hereto as Exhibits (d)(iii) and (d)(iv), respectively, and are also included as Annex C to the Proxy Statement and incorporated herein by reference.
The cross-references below are being supplied pursuant to General
Instruction G to Schedule 13E-3 and show the location in the Proxy Statement of the information required to be included in response to the items of Schedule 13E-3. Pursuant to General Instruction F to Schedule 13E-3, the information contained in the
Proxy Statement, including all annexes and appendices thereto, is incorporated in its entirety herein by reference, and the responses to each item in this Schedule 13E-3 are qualified in their entirety by the information contained in the Proxy
Statement and the annexes and appendices thereto.
Capitalized terms used but not expressly defined in this Schedule 13E-3
shall have the respective meanings given to them in the Proxy Statement.
The information concerning ARC contained in, or incorporated by reference
into, this Schedule 13E-3 and the Proxy Statement was supplied by ARC. Similarly, all information concerning each other Filing Person contained in, or incorporated by reference into this Schedule 13E-3 and the Proxy Statement was supplied by such
Filing Person. No Filing Person, including ARC, is responsible for the accuracy of any information supplied by any other Filing Person.
While each of the Filing Persons acknowledges that the Merger is a “going
private” transaction for purposes of Rule 13e-3 under the Exchange Act, the filing of this Transaction Statement shall not be construed as an admission by any Filing Person, or by any affiliate of a Filing Person, that the Company is “controlled” by
any Filing Person.
| Item 1. |
Summary Term Sheet |
The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE
SPECIAL MEETING”
| Item 2. |
Subject Company Information |
(a) Name and Address. The information set forth in the Proxy
Statement under the following caption is incorporated herein by reference:
“PARTIES TO THE MERGER”
(b) Securities. The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE
SPECIAL MEETING”
“THE SPECIAL MEETING - Voting”
“THE SPECIAL MEETING - Record Date and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Market
for ARC Common Stock and Dividends”
“OTHER IMPORTANT INFORMATION REGARDING
ARC - Security Ownership of Certain Beneficial Owners and Management”
(c) Trading Market and Price. The information set forth in the Proxy
Statement under the following caption is incorporated herein by reference:
“SUMMARY TERM SHEET – Other Important Information Regarding ARC”
“OTHER IMPORTANT INFORMATION REGARDING ARC- Market for ARC
Common Stock and Dividends”
(d) Dividends. The information set forth in the Proxy Statement
under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING ARC - Market for ARC
Common Stock and Dividends”
“THE MERGER AGREEMENT - Conduct of Business Pending the Merger”
(e) Prior Public Offerings. The information set forth in the Proxy
Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING ARC - Prior
Public Offerings”
(f) Prior Stock Purchases. The information set forth in the Proxy
Statement under the following caption is incorporated herein by reference:
“OTHER IMPORTANT INFORMATION REGARDING ARC - Stock
Repurchases”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Certain Transactions in
the Shares of ARC Common Stock”
| Item 3. |
Identity and Background of Filing Person |
(a)-(c) Name and Address; Business and Background of Entities; Business
and Background of Natural Persons. ARC is the subject company. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET – Parties to the Merger”
“PARTIES TO THE MERGER”
“OTHER IMPORTANT INFORMATION REGARDING ARC”
“OTHER IMPORTANT INFORMATION REGARDING THE PURCHASER
FILING PARTIES”
(d) Tender Offer. Not applicable.
| Item 4. |
Terms of the Transaction |
(a)(1) Material Terms. Tender Offers. Not Applicable.
(a)(2) Material Terms. Mergers or Similar Transactions. The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE
SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Material U.S. Federal Income Tax Consequences of
the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Accounting Treatment”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING - Vote Required”
Annex A – Merger Agreement
(c) Different Terms. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS – Limited Guarantee”
“SPECIAL FACTORS – Voting Agreement”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex E –Voting Agreement
Annex H – Limited Guarantee
(d) Appraisal Rights. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Appraisal Rights”
“THE MERGER AGREEMENT - Merger Consideration”
“THE SPECIAL MEETING - Appraisal Rights”
“THE MERGER (THE MERGER AGREEMENT PROPOSAL - PROPOSAL 1) - Appraisal
Rights”
Annex A – Merger Agreement
Annex G - Section 262 of the DGCL
(e) Provisions for Unaffiliated Security Holders. The information
set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“PROVISIONS FOR UNAFFILIATED STOCKHOLDERS”
(f) Eligibility for Listing or Trading. Not Applicable.
| Item 5. |
Past Contacts, Transactions, Negotiations and Agreements |
(a) Transactions. The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS – Voting Agreement”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Certain Transactions in
the Shares of ARC Common Stock”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex D –Voting Agreement
(b) Significant Corporate Events. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantee”
“SPECIAL FACTORS – Voting Agreement”
“THE MERGER AGREEMENT”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex D –Voting Agreement
Annex H – Limited Guarantee
(c) Negotiations or Contacts. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“THE MERGER AGREEMENT”
(e) Agreements Involving the Subject Company’s Securities. The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to
Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in
Favor of the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantee”
“SPECIAL FACTORS – Voting Agreement”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Certain Transactions in
the Shares of ARC Common Stock”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex D –Voting Agreement
Annex H – Limited Guarantee
| Item 6. |
Purposes of the Transaction and Plans or Proposals |
(b) Use of Securities Acquired. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
(c)(1)-(8) Plans. The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to
Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in
Favor of the Merger”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantee”
“SPECIAL FACTORS – Voting Agreement”
“THE MERGER AGREEMENT”
“THE SPECIAL MEETING”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex E –Voting Agreement
| Item 7. |
Purposes, Alternatives, Reasons and Effects |
(a) Purposes. The information set forth in the Proxy Statement under
the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
(b) Alternatives. The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Certain Effects on ARC if the Merger is Not
Completed”
(c) Reasons. The information set forth in the Proxy Statement under
the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial
Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
Annex B - Opinion of William Blair & Company, L.L.C.
(d) Effects. The information set forth in the Proxy Statement under
the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Plans for ARC After the Merger”
“SPECIAL FACTORS - Certain Effects of the Merger”
“SPECIAL FACTORS - Certain Effects on ARC if the Merger is Not
Completed”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Material U.S. Federal Income Tax Consequences of
the Merger”
“SPECIAL FACTORS - Fees and Expenses”
“SPECIAL FACTORS - Accounting Treatment”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT”
“DELISTING AND DEREGISTRATION OF COMMON STOCK”
Annex A – Merger Agreement
| Item 8. |
Fairness of the Transaction |
(a), (b) Fairness; Factors Considered in Determining Fairness. The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial
Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“THE MERGER AGREEMENT”
Annex B - Opinion of William Blair & Company, L.L.C.
(c) Approval of Security Holders. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“THE MERGER AGREEMENT - Conditions to the Closing of the Merger”
“THE SPECIAL MEETING - Record Date and Quorum”
“THE SPECIAL MEETING - Vote Required”
“THE SPECIAL MEETING - Voting”
“THE SPECIAL MEETING - Abstentions”
“THE SPECIAL MEETING - How to Vote”
“THE SPECIAL MEETING - Proxies and Revocation”
Annex A – Merger Agreement
(d) Unaffiliated Representative. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial
Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
(e) Approval of Directors. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
(f) Other Offers. The information set forth in the Proxy Statement
under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“THE MERGER AGREEMENT - Solicitation of Other Offers”
“THE MERGER AGREEMENT – Change of Recommendation”
Annex A – Merger Agreement
| Item 9. |
Reports, Opinions, Appraisals and Negotiations |
(a), (b) Report, Opinion or Appraisal; Preparer and Summary of the
Report, Opinion or Appraisal. The information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Opinion of the Special Committee’s Financial
Advisor”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
“WHERE YOU CAN FIND MORE INFORMATION”
Annex B - Opinion of William Blair & Company, L.L.C.
(c) Availability of Documents. The reports, opinions or appraisals
referenced in this Item 9 will be made available for inspection and copying at the principal executive offices of ARC during its regular business hours by any interested equity holder of ARC Common Stock or by a representative who has been so
designated in writing.
| Item 10. |
Source and Amount of Funds or Other Consideration |
(a), (b) Source of Funds; Conditions. The information set forth in
the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Financing of the Merger”
“SPECIAL FACTORS - Limited Guarantee”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Exchange and Payment Procedures”
“THE MERGER AGREEMENT - Effect of the Merger”
“THE MERGER AGREEMENT - Closing and Effective Time”
“THE MERGER AGREEMENT - Conduct of Business Pending the Merger”
“THE MERGER AGREEMENT - Conditions to the Closing of the Merger”
Annex A – Merger Agreement
(c) Expenses. The information set forth in the Proxy Statement under
the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Fees and Expenses”
“THE MERGER AGREEMENT - Termination of the Merger Agreement”
“THE MERGER AGREEMENT - Termination Fees”
“THE MERGER AGREEMENT - Fees and Expenses”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of
Solicitation Expenses”
Annex A – Merger Agreement
(d) Borrowed Funds.
“SPECIAL FACTORS - Financing of the Merger”
| Item 11. |
Interest in Securities of the Subject Company |
(a) Securities Ownership. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS – Voting Agreement”
“THE SPECIAL MEETING - Record Date and Quorum”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Security Ownership of
Certain Beneficial Owners and Management”
Annex C – Rollover Agreement
Annex E –Voting Agreement
(b) Securities Transactions. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS – Voting Agreement”
“THE MERGER AGREEMENT”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Stock Repurchases”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Certain Transactions in
the Shares of ARC
Common Stock”
Annex A – Merger Agreement
Annex C – Rollover Agreement
Annex E –Voting Agreement
| Item 12. |
The Solicitation or Recommendation |
(d) Intent to Tender or Vote in a Going-Private Transaction. The
information set forth in the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“SPECIAL FACTORS - Intent of the Directors and Executive Officers to
Vote in Favor of the Merger”
“SPECIAL FACTORS - Intent of the Purchaser Filing Parties to Vote in
Favor of the Merger”
“SPECIAL FACTORS - Voting Agreement”
“THE SPECIAL MEETING - Record Date and Quorum”
“THE SPECIAL MEETING - Voting Intentions of ARC’s Directors and
Executive Officers”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Directors and Executive
Officers of ARC”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Security Ownership of
Certain Beneficial Owners and Management”
Annex C - Rollover Agreement
Annex F – Voting Agreement
(e) Recommendation of Others. The information set forth in the Proxy
Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Notice Regarding Ratification Under Section 204
of the Delaware General Corporation Law”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Position of the Purchaser Filing Parties as to
the Fairness of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of the Purchaser Filing
Parties for the Merger”
| Item 13. |
Financial Statements |
(a) Financial Information. The audited consolidated financial
statements of the Company for the fiscal years ended December 31, 2023 and 2022 are incorporated herein by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 29, 2024 (see “Item 8.
Financial Statements and Supplementary Data” beginning on page 35). The unaudited financial statements of the Company for the six months ended June 30, 2024 are incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 2024, filed on August 8, 2024 (see “Item 1. Condensed Consolidated Financial Statements” beginning on page 6).
The information set forth in the Proxy Statement under the following
captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Book
Value per Share”
“OTHER IMPORTANT INFORMATION REGARDING ARC - Selected Historical
Consolidated Financial Data”
“WHERE YOU CAN FIND MORE INFORMATION”
(b) Pro Forma Information. Not Applicable.
| Item 14. |
Persons/Assets, Retained, Employed, Compensated or Used |
(a) Solicitations or Recommendations. The information set forth in
the Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Purpose and Reasons of ARC for the Merger;
Recommendations of the ARC Board and the Special Committee; Fairness of the Merger”
“SPECIAL FACTORS - Fees and Expenses”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of
Solicitation Expenses”
(b) Employees and Corporate Assets. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE SPECIAL MEETING”
“SPECIAL FACTORS - Background of the Merger”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“THE SPECIAL MEETING”
“THE SPECIAL MEETING - Solicitation of Proxies; Payment of
Solicitation Expenses”
| Item 15. |
Additional Information |
(b) Golden Parachute Compensation. The information set forth in the
Proxy Statement under the following captions is incorporated herein by reference:
“SUMMARY TERM SHEET”
“SPECIAL FACTORS - Interests of Executive Officers and Directors of
ARC in the Merger”
“Merger-Related Compensation Proposal (The Merger-Related
Compensation Proposal—Proposal 3)”
(c) Other Material Information. The entirety of the Proxy Statement,
including all annexes and appendices thereto, is incorporated herein by reference.
The following exhibits are filed herewith:
| Exhibit No. |
|
Description |
| (a)(2)(i) |
|
Preliminary Proxy Statement of ARC Document Solutions, Inc.
(included in the Schedule 14A filed on September 1 1 , 2024, and incorporated herein by reference) (the “Preliminary Proxy Statement”). |
| (a)(2)(ii) |
|
Form of Proxy Card (included in the Preliminary Proxy
Statement and incorporated herein by reference). |
| (a)(2)(iii) |
|
Letter to Stockholders (included in the Preliminary Proxy
Statement and incorporated herein by reference). |
| (a)(2)(iv) |
|
Notice of Special Meeting of Stockholders (included in the
Preliminary Proxy Statement and incorporated herein by reference). |
| (a)(2)(v) |
|
Current Report on Form 8-K, filed August 28, 2024 (included
in the Preliminary Proxy Statement and incorporated herein by reference). |
(a)(2)(vi)
|
|
Current Report on Form 8-K filed September 11 (included in the Preliminary Proxy Statement and incorporated herein by reference)
|
| (a)(5)(i) |
|
Press Release, dated August 28, 2024 (incorporated by
reference to Exhibit 99.1 of the Company’s Form 8-K (filed August 28, 2024) (File No. 001-32407)). |
| (c)(i) |
|
Opinion of William Blair & Company, L.L.C., dated August
27, 2024 (included as Annex B to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (c)(ii) |
|
Discussion Materials of William Blair & Company, L.L.C.
for the Special Committee, dated June 20, 2024. |
| (c)(iii) |
|
Discussion Materials of William Blair & Company, L.L.C.
for the Special Committee, dated August 27, 2024. |
| (c)(iv) |
|
Discussion Materials of AlixPartners, LLC for the Special
Committee, dated June 20, 2024. |
| (d)(i) |
|
Agreement and Plan of Merger, dated August 27, 2024 by and among
ARC Document Solutions, Inc.
TechPrint Holdings, LLC, TechPrint Merger Sub, Inc. (included as
Annex A to the Preliminary Proxy Statement, and incorporated herein by reference).
|
| (d)(ii) |
|
First Amendment, dated as of September 10, to the Agreement
and Plan of Merger by and among ARC Document Solutions, Inc. TechPrint Holdings, LLC, TechPrint Merger Sub, Inc. (contained within Annex A to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(iii) |
|
Rollover Agreement, dated as of August 27, 2024, by and
among TechPrint Holdings, LLC, Kumarakulasingam Suriyakumar, Dilantha Wijesuriya, Jorge Avalos, Rahul Roy, Sujeewa Sean Pathiratne, Suriyakumar Family Trust, Shiyulli Suriyakumar 2013 Irrevocable Trust, and Seiyonne Suriyakumar 2013 Irrevocable
Trust (included as Annex C to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(iv) |
|
First Amendment to the Rollover Agreement, dated as of
September 10, by and among TechPrint Holdings, LLC, Kumarakulasingam Suriyakumar, Dilantha Wijesuriya, Jorge Avalos, Rahul Roy, Sujeewa Sean Pathiratne, Suriyakumar Family Trust, Shiyulli Suriyakumar 2013 Irrevocable Trust, and Seiyonne
Suriyakumar 2013 Irrevocable Trust (contained within Annex C to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(v) |
|
Equity Commitment Letter, dated August 27, 2024, dated
August 27, 2024, by and among TechPrint Holdings, LLC, Kumarakulasingam Suriyakumar and Sujeewa Sean Pathiratne (included as Annex D to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(vi) |
|
Voting Agreement, dated as of August 27, 2024, by and among
TechPrint Holdings, LLC, Kumarakulasingam Suriyakumar, Dilantha Wijesuriya, Jorge Avalos, Rahul Roy, Sujeewa Sean Pathiratne, Suriyakumar Family Trust, Shiyulli Suriyakumar 2013 Irrevocable Trust, and Seiyonne Suriyakumar 2013 Irrevocable Trust
(included as Annex E to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(vii) |
|
First Amendment to the Voting Agreement, dated as of September 10, by and among
TechPrint Holdings, LLC, Kumarakulasingam Suriyakumar, Dilantha Wijesuriya, Jorge Avalos, Rahul Roy, Sujeewa Sean Pathiratne, Suriyakumar Family Trust, Shiyulli Suriyakumar 2013 Irrevocable Trust, and Seiyonne Suriyakumar 2013 Irrevocable Trust
(contained within Annex E to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (d)(viii) |
|
Limited Guarantee, dated as of August 27, 2024, by and
between ARC Document Solutions, Inc. and Kumarakulasingam Suriyakumar (included as Annex F to the Preliminary Proxy Statement, and incorporated herein by reference). |
| (f) |
|
Section 262 of the DGCL (included as Annex G to the
Definitive Proxy Statement, and incorporated herein by reference). |
| (g) |
|
Not Applicable. |
| 107 |
|
Filing Fee Table. |
* Previously Filed.
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
ARC DOCUMENT SOLUTIONS, INC. |
| |
|
|
|
| |
By: |
/s/ Tracey Luttrell |
| |
|
Name: |
Tracey Luttrell |
| |
|
Title: |
Corporate Counsel & Corporate Secretary |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
TECHPRINT HOLDINGS, LLC |
| |
|
|
|
| |
By: |
/s/ Kumarakulasingam Suriyakumar |
| |
|
Name: |
Kumarakulasingam Suriyakumar |
| |
|
Title: |
Manager |
| |
|
|
|
| |
TECHPRINT MERGER SUB, INC. |
| |
|
|
|
| |
By: |
/s/ Kumarakulasingam Suriyakumar |
| |
|
Name: |
Kumarakulasingam Suriyakumar |
| |
|
Title: |
President |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
By: |
/s/ Kumarakulasingam Suriyakumar |
| |
|
Name: |
Kumarakulasingam Suriyakumar |
| |
|
|
|
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
By: |
/s/ Dilantha Wijesuriya |
| |
|
Name: |
Dilantha Wijesuriya |
| |
|
|
|
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
By: |
/s/ Jorge Avalos |
| |
|
Name: |
Jorge Avalos |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
By: |
/s/ Rahul Roy |
| |
|
Name: |
Rahul Roy |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
By: |
/s/ Sujeewa Sean Pathiratne |
| |
|
Name: |
Sujeewa Sean Pathiratne |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
SURIYAKUMAR FAMILY TRUST |
| |
|
|
|
| |
By: |
/s/ Kumarakulasingam Suriyakumar |
| |
|
Name: |
Kumarakulasingam Suriyakumar |
| |
|
Title: |
Trustee |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
SHIYULLI SURIYAKUMAR 2013 IRREVOCABLE TRUST |
| |
|
|
|
| |
By: |
/s/ Shiyulli Suriyakumar |
| |
|
Name: |
Shiyulli Suriyakumar |
| |
|
Title: |
Trustee |
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Date: September 1 1 , 2024
| |
SEIYONNE SURIYAKUMAR 2013 IRREVOCABLE TRUST |
| |
|
|
|
| |
By: |
/s/ Seiyonne Suriyakumar |
| |
|
Name: |
Seiyonne Suriyakumar |
| |
|
Title: |
Trustee |
Exhibit
(c)(ii)
CONFIDENTIAL
Discussion
Materials for the Special
Committee
of the Board of Directors
Project
ARIAL
June
20, 2024
William
Blair
CONFIDENTIAL
This
presentation (together with any accompanying oral presentation and any supplementary documents provided therewith, the “Presentation”)
has been prepared by
William
Blair & Company, L.L.C. (“William Blair”) exclusively for the benefit and internal use of the Special Committee
of the Board of Directors of ARIAL (the “Company” or
“ARIAL”).
The accompanying material was compiled or prepared on a confidential basis solely for use by the Special Committee of the Board
of Directors and not with a view
toward
public disclosure, and may not be disclosed, summarized, reproduced, disseminated or quoted, or otherwise referred to in whole
or in part, without the prior written
consent
of William Blair & Company, L.L.C. (“William Blair” or “Blair”). No party may rely on this Presentation
without William Blair’s prior written consent. William Blair
and
its affiliates, partners, directors, employees and agents do not accept responsibility or liability for this Presentation or its
contents (except to the extent that such liability
cannot
be excluded by law).
This
Presentation is for discussion purposes only and speaks only as of the date it is given, and the views expressed are subject to
change based on a number of factors,
including
market conditions and the Recipient’s business and prospects. The information utilized in preparing this presentation was
obtained from the Company, the Speical
Committee
of the Board of Directors, its advisors and public sources. William Blair assumes no responsibility for independent investigation
or verification of any such
information
and has relied on such information being complete and accurate in all respects. Any estimates and projections regarding the Company
contained herein have
been
prepared by senior management of ARIAL and approved for our use by the Special Committee of the Board of Directors, or are publicly
available or based upon such
estimates
and projections and involve numerous and significant subjective determinations, which may or may not prove to be correct, and
William Blair expresses no opinion
with
respect to such estimates, projections and determinations. In addition, any analyses relating to the value of assets, businesses
or securities do not purport to be
appraisals
or to reflect prices at which they may be sold. In furnishing this Presentation, William Blair undertakes no obligation to provide
additional information or to
correct
or update any of the Information.
William
Blair, together with its affiliates and partners, is a financial services institution engaged in a wide range of investment banking
and other activities (including, but
not
limited to, investment management, corporate finance, private wealth management, securities trading, research and brokerage activities).
It is understood and agreed
that
William Blair may, from time to time, make a market in, have a long or short position, buy and sell or otherwise effect transactions
for customer accounts and for their
own
accounts in the securities of, or may perform or be solicited to perform investment banking, corporate finance or other services
for, the Recipient and other third-party
entities
which are or may be the subject of the transactions contemplated by this Presentation. William Blair has adopted policies and
procedures designed to ensure the
independence
of its research analysts, whose views may differ from those of William Blair’s investment banking department and who may
produce research reports and
other
materials the timing or content of which conflict with the views of the investment banking department or the Recipient’s
interests, in connection with the transactions
contemplated
by this Presentation or otherwise.
Nothing
in the Presentation is, or shall be relied upon as, investment advice or any recommendation by William Blair. This Presentation
does not purport to contain all of the
information
that may be necessary or appropriate to evaluate the proposed transaction, and the Recipient should conduct its own independent
assessment and such
investigations
as it deems necessary. Recipient should rely on its own counsel, accountants and other similar expert advisors for legal, regulatory,
accounting, tax and other
similar
advice. Nothing in the Presentation or any related discussions is intended to create, or shall be construed as creating, a principal-agent,
advisor-client or fiduciary
relationship
between William Blair and the Recipient.
Disclosure
1
William
Blair
CONFIDENTIAL
Table
of Contents
Executive
Summary
ARIAL
Situation Update
Selected
Valuation Perspectives
Potential
Strategic Alternatives
Appendix
1
2
3
4
5
William
Blair
CONFIDENTIAL
Executive
Summary
●
ARIAL provides digital printing and document services to customers in a variety of end markets, with four primary
business
segments: Digital Printing, Scanning and Digital Imaging, Managed Print Services (“MPS”), Equipment and
Supplies
sale
●
ARIAL’s portfolio remains at an inflexion point – the Digital Color Graphic Printing and Scanning and Digital Imaging
business
lines remain well-positioned for sustained growth, while the Digital Plan Printing and MPS experience structural
headwinds
–
The Company has successfully transitioned its portfolio mix with Architecture, Engineering, and Construction (“AEC”)
customers
now only comprising ~50% of revenue vs. ~75% in 2019, and blueprinting now only comprising ~25% of
revenue
vs. ~80% a decade ago
–
Digital Color Graphic Printing is the growth engine of the Company with potential for sustained low- to mid-single digit
annual
growth rates, albeit with significantly variable expectations
–
Scanning and Digital Imaging has attractive opportunities, but on a small revenue base today
–
Recovery and outlook of MPS business remains uncertain given broadly less employees in office post-COVID-19
●
ARIAL’s current share price of $2.63 implies 3.2x NTM Consensus EBITDA, which is generally in-line with the average
trading
multiple over the past 12 months of 3.5x
–
Thinly covered by Wall Street research analysts and low trading volume with 126k shares traded daily(1)
●
Management’s plan reflects business to be in a relatively steady state over the next five years
–
The current plan reflects a 2024E-2029E Revenue CAGR of 0.7%, and EBITDA margin compression of 30bps with an
EBITDA
CAGR of 0.2%
–
The Special Committee of ARIAL’s Board of Directors hired AlixPartners on May 17, 2024 to assist ARIAL Management
with
the development of the 5-year Management Plan
(1)
Represents LTM data as of June 18, 2024. 2
William
Blair
CONFIDENTIAL
Executive
Summary (cont’d)
●
On April 8, 2024, Kumarakulasingam Suriyakumar (“Suri”) submitted a proposal to ARIAL’s Board of Directors for
$3.25
per
share in cash
–
Included in the proposal was a highly confident letter from U.S. Bank as the lead left arranger or sole bookrunner for the
financing
–
Purchase price implies a 23.6% premium to ARIAL’s current share price and a transaction multiple of 4.1x LTM
EBITDA(1)
and 4.3x 2024E EBITDA(2)
●
A Special Committee to evaluate Suri’s proposal was formed on April 8, 2024, and William Blair was retained as financial
advisor
to the Special Committee on May 14, 2024
–
The Special Committee has asked William Blair to provide its perspectives on ARIAL in the context of the current
strategic,
trading, and transaction environment
–
William Blair has considered a variety of potential strategic alternatives for ARIAL, ranging from status quo to more
transformational
options including a sale of the Company
(1)
LTM as of March 31, 2024.
(2)
Reflects ARIAL management projections as of June 19, 2024. 3
ARIAL
Situation Update
William
Blair
CONFIDENTIAL
Summary
of Proposed Transaction Terms
Term
Description
Acquiror
● Kumarakulasingam Suriyakumar (“SABON Party”)
Proposed
Consideration ● $3.25 per share in cash
Offer
Premium at Offer Date(1) ● 20.8%
Offer
Premium at Current Date ● 23.6%
Implied
Equity Value ● $144mm(2)
Implied
Enterprise Value ● $154mm(3)
Financing
●
U.S. Bank has provided a letter citing high confidence that structuring and syndication of debt can be arranged in
connection
with the Transaction, with U.S. Bank as lead left arranger and sole bookrunner for the facilities
●
Debt would be in form of senior secured revolving credit facility and a senior secured term loan credit facility
●
Pricing and structure of debt not disclosed
●
Balance of the facilities outside of contemplated U.S. Bank commitment, quantum of which was not disclosed,
would
be required to be obtained from other lenders pursuant to a syndication process
Other
●
SABON Party has requested a Section 203 waiver as part of other potential conversations with shareholders to
potentially
join his buyer group
●
SABON Party has engaged Houlihan Lokey as financial advisor and Loeb & Loeb as legal counsel
(1)
Offer letter date of April 8, 2024.
(2)
Diluted shares outstanding calculated based on 43,236,105 common shares and 6,538,012 options at a weighted average strike price
of $3.27 as of June 12, 2024 per management.
(3)
Includes $52mm in cash, $40mm in revolving credit facility, $21mm in financing leases and $2mm in minority interest as of March
31, 2024. 4
William
Blair
CONFIDENTIAL
Overview
of SABON Party Proposal
Valuation
Summary
($
in millions, except per share figures)
Implied
Premiums(5)
Offer
Price Per Share $3.25
Diluted
Shares Outstanding(1) 44.177
Equity
Value $144
Plus:
Revolving Credit Facility(2) (40)
Plus:
Finance Leases(2) (21)
Plus:
Minority Interest(2) 2)
Less:
Cash(2) (52)
Implied
Enterprise Value $154
Metric
ARIAL
Statistics
Enterprise
Value
Multiple
LTM
Adj. EBITDA(3) $38 4.1x
CY
2024E Adj. EBITDA – Management(4) $36 4.3x
CY
2025E Adj. EBITDA – Management(4) $35 4.4x
As
of June 19, 2024
Premium
To: Date Price Premium
One
Day Prior 6/18/2024 $2.63 23.6%
One
Week Prior 6/11/2024 $2.67 21.7%
One
Month Prior 5/18/2024 $2.76 17.8%
60
Days Prior 4/19/2024 $2.66 22.2%
90
Days Prior 3/20/2024 $2.61 24.5%
180
Days Prior 12/21/2023 $3.05 6.6%
One
Year Prior 6/18/2023 $3.01 8.0%
Source:
ARIAL management projections as of June 19, 2024. SEC filings and FactSet as of June 18, 2024.
(1)
Diluted shares outstanding calculated based on 43,236,105 common shares and 6,538,012 options at a weighted average strike price
of $3.27 as of June 12, 2024 per management.
(2)
Per ARIAL balance sheet as of March 31, 2024.
(3)
LTM as of March 31, 2024.
(4)
Reflects ARIAL management projections as of June 19, 2024.
(5)
Premium calculated based on the SABON party’s offer of $3.25 per share compared to ARIAL’s closing share price per
FactSet on dates noted. Days prior based on calendar days.
5
William
Blair
CONFIDENTIAL
Sources:
Capital IQ, FactSet and SEC filings as of June 18, 2024.
(1)
Represents the SABON party’s April 8, 2024 inbound offer.
(2)
Diluted shares outstanding calculated based on 43,236,105 common shares and 6,538,012 options at a weighted average strike price
of $3.27 as of June 12, 2024 per management.
(3)
Net debt includes $40M of revolver, $21M of finance leases, $2M of minority interest, and $52M of cash and cash equivalents as
of March 31, 2024.
(4)
Trading information based on calendar days.
(5)
LTM as of March 31, 2024.
(6)
Reflects ARIAL management projections as of June 19, 2024.
ARIAL
Trading Snapshot
Share
Price Performance – Last Three Years
Price/share
Volume (M)
Pricing
Info (in millions, except share price)
Price
06/18/2024 $2.63
Diluted
Shares Outstanding (M)(2) 43.681
Equity
Value $115
Net
Debt(3) 10
Enterprise
Value $125
ARIAL
Share Price Performance(4)
1
Month % Change (4.7%)
3
Month % Change 2.7%
6
Month % Change (11.7%)
Valuation
Multiples
EV
/ LTM Adj. EBITDA(5) 3.3x
EV
/ CY 2024E Adj. EBITDA – Management(6) 3.5x
EV
/ CY 2025E Adj. EBITDA – Management(6) 3.6x
Ownership
Statistics
Float
% 83.3%
Insider
% 16.7%
Average
Volume ADTV ($000’s) VWAP
30
Trading Days $228 $2.72
60
Trading Days $256 $2.70
90
Trading Days $322 $2.69
SABON
Party Offer: $3.25(1)
6
William
Blair
CONFIDENTIAL
Historical
Trading Histogram
Last
Twelve Months
Last
Three Years
●
31.7 million shares
traded
over the last
twelve
months
–
~0.9x total float
●
Average daily trading
value:
$0.4 million
(average
of 126K shares)
●
109.4 million shares
traded
over the last
three
years
–
~3.0x total float
●
Average daily trading
value:
$0.4 million
(average
of 145K shares)
Current
Price
$2.63
Sources:
Capital IQ and FactSet as of June 18, 2024.
Note:
Assumes daily volume traded at the average of the intraday high and low price for each day across the time period represented.
(1)
Represents the SABON Party’s April 8, 2024 inbound offer.
Offer
Price(1)
$3.25
Offer
Price(1)
$3.25
Current
Price
$2.63
31.3%
27.8%
18.7%
15.1%
7.2%
$2.50
- $2.75 $2.75 - $3.00 $3.00 - $3.25 $3.25 - $3.50 $3.50 - $3.75
7.6%
41.5%
37.0%
13.4%
0.5%
$2.00
- $2.50 $2.50 - $3.00 $3.00 - $3.50 $3.50 - $4.00 $4.00 - $4.50
7
William
Blair
CONFIDENTIAL
Average
EV / NTM Adj. EBITDA
Company
/ Selected Public Companies YTD Six Month One Year
ARIAL
3.2x 3.3x 3.5x
Peer
Group 5.4x 5.4x 5.5x
Sources:
FactSet as of June 18, 2024.
Multiple
Evolution Over Time
Selected
Public Companies
EV
/ NTM Adj. EBITDA – Last Twelve Months
5.4x
3.2x
0.0x
2.5x
5.0x
7.5x
Jun-23
Sep-23 Dec-23 Mar-24 Jun-24
ARIAL
Selected Public Companies
8
William
Blair
CONFIDENTIAL
Firm
Recommendation Rating Date
Price
Target
Premium
to
Current(1)
2024E
Revenue
2025E
Revenue
2024E
Adj.
EBITDA
2025E
Adj.
EBITDA
Valuation
Methodology
Buy
May 15, 2024 $4.70 79% $284.6 $288.0 N/A N/A
Blend
of 15.0x 2024E
EPS
and DCF analysis
–
May 8, 2024 $6.00 128% $286.0 $294.8 37.2 41.5 18.0x 2025E EPS
Consensus
– Mean $5.35 104% $285.3 $291.4 $37.2 $41.5
Selected
Wall Street Analyst Perspectives
Sources:
Wall Street equity research and FactSet as of June 18, 2024.
(1)
Current share price of $2.63 as of June 18, 2024.
“ARIAL’s
focus markets of digital color printing and scanning delivered
better
than expected growth, which more than offset continued weakness in
its
traditional plan printing, as architectural and construction activity remain
depressed.
We see this as a testament to the success of the company’s
strategic
pivot, which we think has positioned ARIAL for growth, despite the
secular
and cyclical headwinds that are reducing demand for plan printing.”
–
Gregory Burns (May 8th, 2024)
“ARIAL
continues to work to diversify away from its significant dependence
upon
the commercial construction sector, which continues to be somewhat
slow,
as interest rates have been higher for longer, restraining revenue growth.
Despite
weakness in the Company’s largest traditional revenue sector, ARIAL’s
Q1’24
revenue grew 2.7%. This result indicates that the Company is doing an
excellent
job filling the sales funnel with new customer wins and
diversifying
into new sectors.”
–
David P. Marsh (May 15th, 2024)
9
William
Blair
CONFIDENTIAL
Summary
Historical and Projected Financials
CY
2021A – CY 2029E Summary Financials
Sources:
SEC filings and ARIAL management as of June 19, 2024.
(1)
Utilizes 29% tax rate for the forecast period per ARIAL management.
($
in millions) Historicals Forecast CAGR
2021A
2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E 21A - 24E 24E - 29E
Total
Revenue $272 $286 $281 $285 $286 $289 $291 $293 $294 1.5% 0.7%
Gross
Profit $88 $96 $94 $94 $94 $95 $95 $96 $97
Adj.
EBITDA $42 $41 $38 $36 $35 $36 $36 $36 $36 (4.9%) 0.2%
(-)
Depreciation and Amortization (25) (20) (18) (16) (16) (16) (16) (16) (16)
(-)
Stock-Based Compensation (2) (2) (2) (3) (3) (3) (3) (3) (3)
EBIT
$15 $19 $18 $17 $16 $17 $17 $17 $17 3.1% 0.3%
(-)
Cash Taxes(1) (4) (5) (5) (5) (5) (5) (5) (5) (5)
NOPAT
$11 $13 $13 $12 $12 $12 $12 $12 $12 3.1% 0.3%
(+)
Depreciation and Amortization 25 20 18 16 16 16 16 16 16
(-)
Capital Expenditures (4) (6) (11) (11) (9) (9) (9) (9) (9)
(-)
Pro Forma Additional Capitalized Leases (8) (9) (8) (7) (8) (8) (8) (8) (8)
(-)
Increase / (Decrease) in NWC 2 1 5 1 1 0 0 0 0
Unlevered
Free Cash Flow $26 $19 $18 $11 $11 $11 $11 $11 $11 (24.0%) (0.4%)
Revenue
(% Growth) (6.0%) 5.1% (1.7%) 1.2% 0.6% 0.9% 0.7% 0.7% 0.5%
Gross
Profit Margin (%) 32.2% 33.6% 33.6% 33.0% 32.7% 32.8% 32.8% 32.8% 32.8%
Adjusted
EBITDA Margin (%) 15.3% 14.3% 13.6% 12.6% 12.2% 12.3% 12.3% 12.3% 12.3%
Depreciation
and Amortization (% of Revenue) 9.0% 7.1% 6.3% 5.7% 5.6% 5.5% 5.5% 5.5% 5.5%
Capex
(% of Revenue) 1.3% 2.1% 3.8% 3.9% 3.2% 3.2% 3.2% 3.1% 3.1%
Pro
Forma Additional Capitalized Leases (% of Revenue) 3.0% 3.2% 2.7% 2.5% 2.8% 2.8% 2.7% 2.7% 2.7%
Increase
in NWC (% of Revenue) 0.8% 0.2% 1.9% 0.5% 0.2% 0.0% 0.0% 0.0% 0.0%
10
William
Blair
CONFIDENTIAL
Digital
Printing
Revenue
($
in millions)
Business
Segment Revenue Snapshot
Managed
Print Services
Scanning
& Digital Imaging Equipment & Supplies
Revenue
($
in millions)
Revenue
($
in millions)
Revenue
($
in millions)
17.8%
CAGR
10.0%
CAGR
0.4%
CAGR
(1.9%)
CAGR
1.2%
CAGR
0.4%
CAGR
(7.2%)
CAGR
(1.3%)
CAGR
Sources:
SEC filings and ARIAL management as of June 19, 2024.
$72.4
$75.8 $74.8 $73.3 $71.8 $70.4 $69.1 $67.8 $66.5
2021A
2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E
$14.5
$17.4 $20.3 $23.7 $27.4 $30.7 $33.6 $36.1 $38.2
2021A
2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E
$18.6
$18.1 $16.0 $14.9 $14.2 $14.2 $14.1 $14.0 $13.9
2021A
2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E
$166.7
$174.8 $170.1 $172.7 $172.9 $173.7 $174.4 $175.2 $175.8
2021A
2022A 2023A 2024E 2025E 2026E 2027E 2028E 2029E
11
Selected
Valuation Perspectives
William
Blair
CONFIDENTIAL
Summary
of Valuation Analyses
●
Selected Public Companies Analysis
–
Trading multiple analysis based on a total of 6 publicly traded companies in the printing and promotional marketing sectors with
similar business
models
or financial profiles that William Blair deemed relevant
●
Selected Transactions Analysis
–
Transaction multiple analysis based on a total of 10 publicly available transactions in the printing and promotional marketing
sectors with similar
business
models or financial profiles that William Blair deemed relevant
●
Discounted Cash Flow Analysis
–
Utilized projections provided by ARIAL management to derive free cash flows for the Company based on a 10.0% – 12.0% range
of discount rates to
determine
the present values of such cash flows. Estimated a terminal value by utilizing a perpetuity growth rate of 0.0% – 2.0%
●
Leveraged Buyout Analysis
–
Utilized projections provided by ARIAL management to analyze the value at which a leveraged buyout of ARIAL could yield an IRR
between 18.0%
and
22.0% for a potential investor. Assumed total debt of 2.25x leverageable LTM Adj. EBITDA and estimated a terminal value by utilizing
LTM Adj.
EBITDA
multiples of 3.5x to 5.5x applied to 2029E Adj. EBITDA
●
M&A Premiums Paid Analysis
–
Reviewed the premiums derived by comparing the per share equity consideration paid to the closing price of the target stock one
day, one week
and
one month prior to transaction announcement. Premiums were then compared against 308 public North America target transactions
across all
industries
since January 1, 2015 with transaction enterprise values ranging from $100M – $300M
12
William
Blair
CONFIDENTIAL
Sources:
Capital IQ, FactSet, and SEC filings as of June 18, 2024.
(1)
Represents the SABON party’s April 8, 2024 inbound offer.
(2)
Represents median premium paid for public transactions of $100M - $300M transaction Enterprise Value since 2015.
(3)
52 week low of $2.56 occurred on March 22, 2024. 52 week high of $3.69 occurred on July 25, 2023.
(4)
Diluted shares outstanding calculated based on 43,236,105 common shares and 6,538,012 options as of June 12, 2024 per management.
Option weighted average
strike
price equal to $3.27.
(5)
Debt consists of $40M of revolver and $21M of finance leases as of March 31, 2024.
(6)
Projections reflect ARIAL management projections as of June 19, 2024.
Illustrative
Analysis at Various Prices
52-Week
Low(3):
$2.56
52-Week
High(3):
$3.69
Offer
Price(1):
$3.25
Median
Premium
Paid(2):
34.7%
($
in millions, except per share figures) Current
6/18/2024
Price
per Share $2.63 $3.25 $3.50 $3.75 $4.00 $4.25 $4.50
%
premium / (discount) to current 23.6% 33.1% 42.6% 52.1% 61.6% 71.1%
%
premium / (discount) to 30-day VWAP (3.4%) 19.3% 28.5% 37.7% 46.9% 56.0% 65.2%
%
premium / (discount) to 60-day VWAP (2.6%) 20.4% 29.7% 38.9% 48.2% 57.5% 66.7%
%
premium / (discount) to 52 week low (3)
2.7%
27.0% 36.7% 46.5% 56.3% 66.0% 75.8%
%
premium / (discount) to 52 week high (3)
(28.6%)
(11.8%) (5.0%) 1.8% 8.5% 15.3% 22.1%
Diluted
Shares(4) 43.681 44.177 44.434 44.681 44.952 45.192 45.405
Implied
Equity Value $115 144 156 168 180 192 204
Plus:
Total Debt(5) 61 61 61 61 61 61 61
Plus:
Minority Interest 2 2 2 2 2 2 2
Less:
Cash (52) (52) (52) (52) (52) (52) (52)
Implied
Enterprise Value $125 154 166 178 190 202 215
Enterprise
Value Multiples(6) Metric
LTM
Adj. EBITDA $38 3.3x 4.1x 4.4x 4.7x 5.0x 5.3x 5.7x
CY
2024E Adj. EBITDA - Management 36 3.5x 4.3x 4.6x 5.0x 5.3x 5.6x 6.0x
CY
2025E Adj. EBITDA - Management 35 3.6x 4.4x 4.7x 5.1x 5.4x 5.8x 6.1x
13
William
Blair
CONFIDENTIAL
Methodologies
and Assumptions
●
Identified five publicly traded companies in the
printing
and promotional marketing sectors
with
similar business models or financial
profiles
that William Blair deemed relevant
●
Calculated relevant operating and financial
metrics
and the following relevant multiples
and
compared them to the similar multiples for
ARIAL
at the current enterprise value and
implied
transaction value:
–
Enterprise Value / CY 2024E Adj. EBITDA
–
Enterprise Value / CY 2025E Adj. EBITDA
Selected
Public Companies
($
in millions)
Enterprise
Value /
Company
Equity Value
Enterprise
Value
CY
2024E Adj.
EBITDA
CY
2025E Adj.
EBITDA
$2,251
$3,769 7.8x 7.3x
981
2,528 6.2x 6.0x
950
1,623 4.8x 4.8x
1,468
1,311 2.8x 2.4x
258
802 3.4x 3.3x
577
453 5.7x N/A
Maximum
$2,251 $3,769 7.8x 7.3x
Median
965 1,467 5.3x 4.8x
Mean
1,081 1,748 5.1x 4.8x
Minimum
258 453 2.8x 2.4x
Selected
Public Companies Analysis
Sources:
FactSet, SEC filings and Wall Street consensus estimates as of June 18, 2024.
14
William
Blair
CONFIDENTIAL
CY
2023A – CY 2025E Revenue Growth
Selected
Public Companies Performance Metrics
ARIAL
Sources:
FactSet, SEC filings and Wall Street consensus estimates as of June 18, 2024. ARIAL management projections as of June 19, 2024.
Selected
Public Companies
Management
15
William
Blair
CONFIDENTIAL
CY
2024E Adj. EBITDA Margin
Selected
Public Companies Performance Metrics (cont’d)
Selected
Public Companies
CY
2025E Adj. EBITDA Margin
ARIAL
Sources:
FactSet, SEC filings and Wall Street consensus estimates as of June 18, 2024. ARIAL management projections as of June 19, 2024.
Management
Management
Selected
Public Companies ARIAL
16
William
Blair
CONFIDENTIAL
EV
/ CY 2024E Adj. EBITDA
Selected
Public Companies Valuation Metrics
Selected
Public Companies
EV
/ CY 2025E Adj. EBITDA
ARIAL
Sources:
FactSet, SEC filings and Wall Street consensus estimates as of June 18, 2024. ARIAL management projections as of June 19, 2024.
(1)
Implied multiple based on the SABON party’s April 8, 2024 inbound offer of $3.25 per share.
Management
(Current)
Implied
Transaction
Multiple(1)
(Management)
Management
(Current)
Implied
Transaction
Multiple(1)
(Management)
Selected
Public Companies ARIAL
17
William
Blair
CONFIDENTIAL
($
in millions)
ARIAL
Range of Selected Public Companies
Implied
ARIAL
Transaction
Valuation
Multiple Metric Multiple Min. Median Mean Max.
Enterprise
Value / CY 2024E Adj. EBITDA
Management
$36 4.3x 2.8x 5.3x 5.1x 7.8x
Enterprise
Value / CY 2025E Adj. EBITDA
Management
$35 4.4x 2.4x 4.8x 4.8x 7.3x
Selected
Public Companies Analysis Summary
Source:
SEC filings and Factset as of June 18, 2024.
(1)
ARIAL transaction multiple based on Enterprise Value of $154M.
(2)
Represents ARIAL management projections as of June 19, 2024.
(1)
(2)
18
(2)
William
Blair
CONFIDENTIAL
($
in millions)
Date
Ann. Target Acquiror Enterprise Value EV / LTM Adj. EBITDA
Dec-21
R.R. Donnelley & Sons Chatham Asset Management $2,306 5.6x
Sep-20
LSC Communications Atlas Holdings LLC 440 3.1x
Jul-20
InnerWorkings HH Global 302 5.5x
Dec-17
IWCO Direct Steel Connect 476 5.8x
Dec-13
Valassis Communications Harland Clarke 1,839 6.7x
Oct-13
Consolidated Graphics R.R. Donnelley & Sons 719 5.5x
Aug-13
WorkflowOne The Standard Register Co. 218 6.3x
Apr-13
American Greetings Corporation Weiss Family 820 3.7x
Oct-12
Vertis Quad/Graphics 267 4.9x
Aug-12
SuperMedia Dex One Corporation 1,477 2.5x
Max
$2,306 6.7x
Mean
886 5.0x
Median
598 5.5x
Min
218 2.5x
Preliminary
Selected M&A Transactions
Sources:
FactSet and SEC filings as of June 18, 2024.
(1)
3.1x multiple based on 2020E EBITDA of $144 million including normalization for cost savings (for completed or announced plant
closures) and COVID-19 as provided in company filings. Multiple would be
4.2x
based on estimated 2020E EBITDA of $105 million and normalization for COVID-19 only as provided in company filings.
(2)
LTM represents the last twelve months through October 2017 per the 8-K filed by Steel Connect on December 18, 2017.
(3)
LTM represents 2012 figures per the 8-K filed by Quad/Graphics on January 22, 2013. 4.9x multiple includes $97 million payment
for current assets in excess of working capital requirements.
Excluding
payment, multiple would be 3.1x.
(2)
(3)
(1)
19
William
Blair
CONFIDENTIAL
($
in millions)
ARIAL
Range of Selected Transactions
Implied
ARIAL
Transaction
Valuation
Multiple Metric Multiple Min. Median Mean Max.
Enterprise
Value / LTM Adj. EBITDA
Actual
$38 4.1x 2.5x 5.5x 5.0x 6.7x
Preliminary
Selected M&A Transactions Summary
(1)
(2)
(1)
ARIAL transaction multiple based on Enterprise Value of $154M.
(2)
ARIAL LTM Adj. EBITDA as of March 31, 2024.
20
William
Blair
CONFIDENTIAL
Perpetuity
Growth Rate
$3
0.0% 1.0% 2.0%
10.0%
$2.69 $2.87 $3.10
11.0%
2.46 2.60 2.78
12.0%
2.26 2.38 2.53
Discount
Rate
Implied
Equity Value per Share(3)
Illustrative
Discounted Cash Flow Analysis
Assumptions
Sensitivity Analyses
●
William Blair utilized ARIAL management projections to calculate
unlevered
free cash flows for the years ending December 31, 2024
through
December 31, 2029
●
Valuation date of March 31, 2024 and utilizes a mid-year
discount
convention
–
Balance sheet figures as of March 31, 2024
●
Estimated a terminal value by utilizing perpetuity growth rate range of
0.0%
to 2.0% terminal year unlevered FCF(1)
●
A range of discount rates of 10.0% to 12.0% was selected and used to
calculate
a present value of the free cash flows and the terminal value
●
Assumes tax rate of 29.0%(2)
●
Assumes PV of Federal NOL of $9M
Sources:
SEC filings as of June 18, 2024. ARIAL management projections as of June 19, 2024.
Note:
Cash flows are burdened by Stock-Based Compensation.
(1)
Terminal year unlevered FCF of $12M.
(2)
Tax rate per management.
(3)
Diluted shares outstanding calculated based on 43,236,105 common shares and 6,538,012 options as of June 12, 2024 per management.
Option weighted average
strike
price equal to $3.27.
Consideration
per Share: $3.25
21
William
Blair
CONFIDENTIAL
Illustrative
LBO Analysis
Implied
Offer Price
Sources:
FactSet and SEC filings as of June 18, 2023. ARIAL management projections as of June 19, 2024.
(1)
Represents the SABON party’s April 8, 2024 inbound offer.
(2)
2029E Adj. LTM Adj. EBITDA of $38M.
(3)
Tax rate per management. Utilizes NOLs to offset tax liability during the projection period.
●
William Blair utilized ARIAL management projections to analyze the
value
at which a leveraged buyout of ARIAL could occur and yield an IRR
between
18.0% and 22.0%
●
Valuation and balance sheet figures as of March 31, 2024
●
Assumes total debt of $85M (2.25x LTM Adj. EBITDA): Unitranche at
SOFR+600
●
Estimated a terminal value by utilizing LTM Adj. EBITDA multiples of 3.5x
to
5.5x applied to CY 2029E Adj. EBITDA
●
Analysis reflects $1M of annual public company cost savings
●
Assumes tax rate of 29.0%(3)
●
Minimum cash balance of $10M; transaction expenses of $5M
(2)
Assumptions
Sensitivity Analyses
2029E
LTM Adj. EBITDA Multiple
3.5x
4.5x 5.5x
18.0%
$2.32 $2.62 $2.91
20.0%
$2.23 $2.50 $2.77
22.0%
$2.15 $2.39 $2.64
IRR
22
William
Blair
CONFIDENTIAL
Methodologies
and Assumptions
●
William Blair analyzed 308 public North American target transactions across all industries with transaction enterprise values
between $100 – $300
million
that were announced since January 1, 2015.
●
William Blair compared the price of each transaction to the closing price of the target stock one day, one week and one month
prior to the
announcement
of the transaction
●
William Blair then compared the range of premiums calculated from that universe to the premiums implied by the Transaction
Preliminary
Illustrative Selected Premiums Paid Observations
Implied
Premium Premiums Paid Data Percentile
Period
@ $3.25/share 10th 20th 30th 40th 50th 60th 70th 80th 90th
One
Day Prior 23.6% (2.2%) 10.1% 19.3% 26.4% 34.7% 41.6% 52.0% 67.4% 106.8%
One
Week Prior 21.7% (1.8%) 10.5% 21.1% 28.2% 37.4% 45.7% 56.7% 72.3% 107.3%
One
Month Prior 17.8% 2.9% 11.6% 22.4% 29.8% 37.2% 48.1% 61.3% 81.1% 115.5%
Sources:
Premiums data as of June 18, 2024. Market data as of June 18, 2024.
Note:
Analysis represents all cash consideration. Excludes transactions related to REITs, Oil & Gas, Mining, Utilities, and Finance.
23
Potential
Strategic Alternatives
William
Blair
CONFIDENTIAL
Summary
Landscape of Potential Strategic Alternatives
A
Status Quo
B
Capital Raise
D
Scaled M&A
E
Transformational Merger
F
Sale of the Company
C
Tuck-in M&A
ARIAL
24
William
Blair
CONFIDENTIAL
Benefits
Considerations
✓
Ability to realize upside potential from
standalone
plan
✓
Shareholders will continue to benefit from
attractive
return of capital program
✓
Continue to capture growth opportunity in Digital
Color
Graphic Printing and further diversify
business
into other potential higher growth
vectors
?
Execution risk in delivering standalone plan
?
Ongoing potential secular headwinds in certain business lines
(e.g.,
Digital Plan Printing and MPS)
?
Challenges receiving sufficient investor attention and focus as
a
micro-cap stock
?
Level of investment needed to develop new business lines
and
accelerate status quo
✓
Ability to accelerate investments into value-accretive
organic
initiatives or M&A
✓
Equity raise would create opportunity to re-position
equity
story to new investors
?
Would likely require clearly defined use of proceeds given level
of
cash on balance sheet today
?
Dilution and potential size of offering of equity raise
?
Increased leverage would reverse recent initiatives related to
balance
sheet (i.e., de-levered from 2.2x in 2017 to 0.3x today)
✓
Opportunity to accelerate portfolio mix to higher
growth
categories
✓
Ability to realize synergies
✓
Potential to create value if acquired at low
synergized
multiples
?
Limited track record over past ~15 years, albeit Company
executed
meaningful M&A activity before then
?
Time horizon to execute and size of opportunity likely create
headwinds
for strategy to be “needle-moving”
Status
Quo
ARIAL’s
Landscape of Strategic Options
A
Capital
Raise
Tuck-in
M&A
B
C
Confidence
in the business plan and assessment of potential upside and downside factors will inform
attractiveness
of strategic alternatives
25
William
Blair
CONFIDENTIAL
Benefits
Considerations
✓
Ability to leverage the cost base in a meaningful
way
– “needle moving”
✓
Potential for significant synergies
✓
Potential to shift portfolio to complementary growth
vectors
or further consolidate industry
?
Potential management distraction and integration risk
?
Limited number of scaled M&A targets
?
Requisite leverage and / or dilution to fund potential acquisition
✓
Ability to share in the future “upside”
✓
Potentially significant synergy potential
✓
Benefits of increased scale and go-forward
positioning
to invest in higher growth categories
?
Identifying potential partners
?
Relative valuation considerations
?
Requires negotiation of key “social issues” (e.g., Board,
Management,
company name, etc.)
✓
Potential to deliver near-term value creation /
liquidity
to shareholders
✓
Allows for execution and potential acceleration of
strategic
plan outside of public domain
✓
Elimination of public company costs
?
Premium today vs. potential for longer-term share price
increases
through execution of value creating alternatives
?
Seemingly limited range of potential strategic buyers or
financial
sponsor buyer, who typically could deliver outsized
value
?
Process can be disruptive to business
Merger
of Equals
ARIAL’s
Landscape of Strategic Options (cont’d)
Scaled
M&A
D
E
F
Sale
of Whole
Company
Confidence
in the business plan and assessment of potential upside and downside factors will inform
attractiveness
of strategic alternatives
26
Appendix
William
Blair
CONFIDENTIAL
Project
ARIAL Process Summary
Key
Events
April
8, 2024 SABON party released offer letter to the Board of Directors
April
8, 2024 The Board of Directors formed a Special Committee in response to the offer letter from SABON party
April
16, 2024 The Special Committee engaged K&L Gates as legal counsel
May
2, 2024 Loeb & Loeb contacted K&L Gates to discuss a Section 203 waiver from the ARIAL Special Committee for SABON Party
May
14, 2024 Special Committee engaged William Blair as financial advisor
May
17, 2024 Special Committee engages Alix Partners to assist ARIAL with development of a 5-year business plan
May
21, 2024 William Blair and Alix Partners held diligence session with management
May
28, 2024 William Blair and Alix Partners held diligence session with management
May
28, 2024
Houlihan
Lokey communicated to William Blair that SABON Party has requested a Section 203 waiver from ARIAL
Special
Committee and requested feedback
May
29, 2024
William
Blair communicated to Houlihan Lokey that Special Committee will provide perspectives on Section 203 waiver
during
the week of June 17th
June
4, 2024 William Blair and Alix Partners held diligence session with management
June
5, 2024 William Blair and Alix Partners held diligence session with management
June
5, 2024 William Blair and Houlihan Lokey discussed response timeline from Special Committee
June
11, 2024 Alix Partners held working session with management to refine 5-year financial projections
June
13, 2024 Alix Partners held working session with management to refine 5-year financial projections
June
17, 2024 Alix Partners held working session with management to refine 5-year financial projections
27
William
Blair
CONFIDENTIAL
Selected
Public Companies Performance Metrics
Sources:
FactSet and SEC filings as of June 18, 2024.
(1)
Reflects ARIAL management projections as of June 19, 2024.
(2)
Represents the SABON party’s April 8, 2024 inbound offer.
Selected
Public Companies
%
of Revenue CAGR Adj. EBITDA Margin
($
in millions, except per share data) Share Price (USD) 52-Week High Equity Value Enterprise Value CY ‘23A - CY ‘25E
CY 2024E Adj. EBITDA CY 2025E Adj. EBITDA
Cimpress
Plc $83.27 83.3% $2,251 $3,769 5.9% 14.2% 14.3%
Deluxe
Corporation 21.67 90.3% 981 2,528 (0.2%) 19.0% 19.4%
Transcontinental
Inc. Class A 10.68 96.5% 950 1,623 (1.2%) 16.4% 16.6%
ODP
Corporation 39.58 67.1% 1,468 1,311 (2.6%) 6.3% 7.2%
Quad/Graphics,
Inc. Class A 4.88 72.3% 258 802 (4.1%) 8.6% 8.9%
Ennis,
Inc. 22.19 95.8% 577 453 N/A 19.4% N/A
75th
Precentile 94.4% $1,346 $2,302 (0.2%) 18.4% 16.6%
Mean
84.2% 1,081 1,748 (0.4%) 14.0% 13.3%
Median
86.8% 965 1,467 (1.2%) 15.3% 14.3%
25th
Percentile 75.0% 670 929 (2.6%) 10.0% 8.9%
ARIAL(1)
$2.63 71.4% $115 $125 0.9% 12.6% 12.2%
ARIAL
(At Offer Price)(2) $3.25 88.2% $144 $154 0.9% 12.6% 12.2%
28
William
Blair
CONFIDENTIAL
Selected
Public Companies Valuation Metrics
Sources:
FactSet and SEC filings as of June 18, 2024.
(1)
Reflects ARIAL management projections as of June 19, 2024.
(2)
Represents the SABON party’s April 8, 2024 inbound offer.
Selected
Public Companies
%
of Enterprise Value /
($
in millions, except per share data) Share Price (USD) 52-Week High Equity Value Enterprise Value CY 2024E Adj. EBITDA CY
2025E Adj. EBITDA
Cimpress
Plc $83.27 83.3% $2,251 $3,769 7.8x 7.3x
Deluxe
Corporation 21.67 90.3% 981 2,528 6.2x 6.0x
Transcontinental
Inc. Class A 10.68 96.5% 950 1,623 4.8x 4.8x
ODP
Corporation 39.58 67.1% 1,468 1,311 2.8x 2.4x
Quad/Graphics,
Inc. Class A 4.88 72.3% 258 802 3.4x 3.3x
Ennis,
Inc. 22.19 95.8% 577 453 5.7x N/A
75th
Precentile 94.4% $1,346 $2,302 6.1x 6.0x
Mean
84.2% 1,081 1,748 5.1x 4.8x
Median
86.8% 965 1,467 5.3x 4.8x
25th
Percentile 75.0% 670 929 3.7x 3.3x
ARIAL(1)
$2.63 71.4% $115 $125 3.5x 3.6x
ARIAL
(At Offer Price)(2) $3.25 88.2% $144 $154 4.3x 4.4x
29
William
Blair
CONFIDENTIAL
Public
Ownership Summary (Top 25 Shareholders)
Top
25 Shareholders
Sources:
FactSet and SEC filings as of June 18, 2024.
(1)
As of June 12, 2024 per management.
Common
Shares O/S (mm)(1) 43.236
Float
% 83.3%
Insider
% 16.7%
Ownership
Statistics (Basic)
Top
Insiders
Name
% of Total
Suriyakumar
Kumarakulasingam, CEO 10.5%
Dilantha
Wijesuriya, COO 1.9%
Jorge
Avalos, CFO 1.3%
Rahul
Roy, CTO 1.1%
Mark
W. Mealy 0.9%
Other
1.0%
Total
16.7%
Shareholder
Position % of Total Avg. Cost Basis
Suriyakumar
Kumarakulasingam, CEO 4,554,415 10.5% $7.96
Renaissance
Technologies LLC 2,809,897 6.5% 4.20
The
Vanguard Group, Inc. 1,936,191 4.5% 6.20
North
Star Investment Management Corp. 1,494,828 3.5% 2.31
Dimensional
Fund Advisors LP 1,466,811 3.4% 4.66
Pacific
Ridge Capital Partners LLC 1,311,990 3.0% 2.56
BlackRock
Fund Advisors 1,286,991 3.0% 9.89
Acadian
Asset Management LLC 1,275,779 3.0% 2.56
Bridgeway
Capital Management LLC 993,584 2.3% 2.41
Alan
W. Weber (Investment Management) 969,700 2.2% 4.53
Dilantha
Wijesuriya, COO 825,653 1.9% 5.95
LSV
Asset Management 810,020 1.9% 3.38
JBF
Capital, Inc. 647,777 1.5% 2.51
Jorge
Avalos, CFO 553,347 1.3% 2.77
Hillsdale
Investment Management, Inc. 520,037 1.2% 3.21
Rahul
Roy, CTO 467,501 1.1% 2.93
Credit
Suisse Gestion SGIIC SA 428,091 1.0% 2.79
Verdad
Advisers LP 427,398 1.0% 1.30
Mark
W. Mealy (Insider) 401,718 0.9% 3.64
Mirador
Capital Partners LP 400,151 0.9% 1.76
Susquehanna
Financial Group LLLP 370,525 0.9% 2.89
Mellon
Investments Corp. 356,334 0.8% 2.91
Geode
Capital Management LLC 354,651 0.8% 5.06
Arrowstreet
Capital LP 342,305 0.8% 3.18
Aristides
Capital LLC 321,494 0.7% 1.17
Top
25 Shareholders Total 25,327,188 58.6% $4.72
Total
Common Shares Outstanding 43,236,105
30
Exhibit (c)(iii)
CONFIDENTIAL Presentation
to the Special Committee of the Board of Directors of ARIAL August 27, 2024
William Blair CONFIDENTIAL
The following pages contain material (together with any accompanying oral presentation and any supplementary documents provided
therewith, the gmaterialsh) provided to the Special Committee of the Board of Directors (the gSpecial Committeeh) of ARC Document
Holdings, Inc. (the gCompanyh or gARIALh) in the context of a meeting held to consider the Merger Consideration proposed to be
paid to the stockholders of the Company pursuant to the terms and subject to the conditions set forth in the draft Agreement and
Plan of Merger dated August 27, 2024 (the gMerger Agreementh) by and among TechPrint Holdings, LLC, TechPrint Merger Sub, Inc.,
and the Company. The accompanying material was compiled or prepared on a confidential basis solely for use by the Special Committee
and not with a view toward public disclosure, and may not be disclosed, summarized, reproduced, disseminated or quoted, or otherwise
referred to in whole or in part, without the prior written consent of William Blair & Company, L.L.C. (gWilliam Blairh or
gBlairh). The information utilized in preparing this presentation was obtained from the Company, the Special Committee, its advisors
and public sources. William Blair assumes no responsibility for independent investigation or verification of any such information
and has relied on such information being complete and accurate in all respects. Any estimates and projections regarding the Company
contained herein have been prepared by AlixPartners, a third]party consultant engaged by the Special Committee, with the assistance
and significant input from management, and approved for our use by the Special Committee, or are publicly available or based upon
such estimates and projections and involve numerous and significant subjective determinations, which may or may not prove to be
correct, and William Blair expresses no opinion with respect to such estimates, projections and determinations. In addition, any
analyses relating to the value of assets, businesses or securities do not purport to be appraisals or to reflect prices at which
they may be sold. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of such information
and nothing contained herein is, or shall be relied upon as, a representation or warranty, whether as to the past or the future.
William Blair does not take any responsibility for the accuracy or completeness of any of the material used by the persons other
than the Special Committee. William Blair does not undertake any obligation to update or otherwise revise the accompanying materials.
William Blairfs only opinion is its written opinion delivered of the Special Committee. Important Information Confidential Material
Presented to the Special Committee of ARIALfs Board of Directors 1
William Blair CONFIDENTIAL
Table of Contents Section I Scope of Review & Analysis Section II Transaction Overview Section III ARIAL Situation Update
and Financial Information Section IV Valuation Analyses A. Selected Public Companies Analysis B. Selected Precedent Transactions
Analysis C. Discounted Cash Flow Analysis D. Leveraged Buyout Analysis E. M&A Premiums Paid Analysis
Scope of Review &
Analysis
William Blair CONFIDENTIAL
Scope of Review and Analysis „P William Blair’s role is to render its opinion to the Special Committee as to the fairness,
from a financial point of view, to the holders (other than holders of Rollover Shares (as defined in the Merger Agreement) or
any Dissenting Shares (as defined in the Merger Agreement)) of shares of common stock, par value $0.001 per share, of ARIAL (the
“Company Common Stock”) of the Merger Consideration (as defined on page 5 herein) to be received by such holders pursuant to the
Agreement and Plan of Merger, dated as of August 27, 2024 (the “Merger Agreement”) by and among TechPrint Holdings, LLC, TechPrint
Merger Sub, Inc., and the Company, pursuant to which Merger Sub will merge with and into the Company, with the Company surviving
the Merger as the surviving corporation and a wholly-owned subsidiary of Parent (the “Merger”). „P In connection with our
review of the Merger and the preparation of our opinion, Blair has examined or discussed: ¡V The draft of the Merger Agreement
dated August 27, 2024, and Blair has assumed that the final form of the Merger Agreement will not differ from such draft in any
material respects; ¡V Audited historical financial statements of the Company included in its filings with the Securities
and Exchange Commission (the ¡§SEC¡¨) as of for the three fiscal years ended December 31, 2023, 2022 and
2021; ¡V Unaudited financial statements of the Company included in its filings with the SEC as of and for the 3 and 6 months
ended June 30, 2024; ¡V Certain internal business, operating and financial information and forecasts of the Company for
the fiscal years ending December 31, 2024 through December 31, 2029, including certain estimates as to potentially realizable
existing federal net operating loss carryforwards expected to be utilized by the Company (the ¡§Forecast¡¨
or ¡§Management Plan¡¨), prepared by AlixPartners, a third-party consultant engaged by the Special Committee,
with the assistance and significant input from management, and provided to us on June 19, 2024 and subsequently updated by management
on August 1, 2024; ¡V Information regarding publicly available financial terms of certain other transactions Blair deemed
relevant; ¡V Information regarding certain publicly traded companies Blair deemed relevant; ¡V The financial position
and operating results of the Company compared with those of certain publicly traded companies Blair deemed relevant; ¡V
The current and historical market prices and trading volumes of the Company Common Stock; and ¡V Certain other publicly
available information on the Company. „P Blair has also held discussions with members of senior management of the Company
and AlixPartners to discuss the foregoing. „P Blair was not asked to consider, and its opinion does not address, the relative
merits of the Merger as compared to any alternative business strategies that might exist for the Company or the effort of any
other transaction in which ARIAL might engage. „P Blair has also considered other matters deemed relevant to this analysis
and has taken into account such accepted financial and investment banking procedures and considerations as deemed relevant. 2
William Blair CONFIDENTIAL
„P Blair has assumed and relied, without any independent verification and with the consent of the Special Committee, upon
the accuracy and completeness of all the financial, legal, regulatory, tax, accounting and other information provided to, that
was examined by, or otherwise reviewed or discussed with us for purposes of this presentation, including without limitation the
Forecast prepared by AlixPartners with the assistance and significant input from management, and approved for our use by Special
Committee and Blair assumes no responsibility or liability therefor. „P Blair has not made or obtained an independent valuation
or appraisal of the assets, liabilities or solvency of the Company. „P Blair has been advised by the senior management of
the Company that the Forecast examined by us have been reasonably prepared on bases reflecting the best currently available estimates
and judgments of the senior management of the Company and AlixPartners. In that regard, Blair has assumed, with the consent of
the Special Committee, that (i) the Forecast will be achieved in the amounts and at times contemplated thereby and (ii) all material
assets and liabilities (contingent or otherwise) of the Company are as set forth in the Company¡¦s financial statements
or other information made available to us. „P Blair expresses no opinion with respect to the Forecast or the estimates and
judgments on which they are based. „P Blair did not consider, and express no opinion as to, the amount or nature of the
compensation to any of the Company¡¦s officers, directors or employees (or any class of such persons) relative to
the Merger Consideration payable to the Company¡¦s other stockholders. „P Blair expresses no opinion as to
any terms or other aspects of the Merger (other than the Merger Consideration to the extent specified herein), including, without
limitation, the form or structure of the Merger, or tax or accounting consequences thereof. „P This presentation is based
upon economic, market, financial and other conditions existing on, and other information disclosed to Blair, as of the date hereof.
„P It should be understood that although subsequent developments may affect the opinion, Blair does not have any obligation
to update, revise or reaffirm the opinion. „P Blair has not made any determination as to legal matters related to the Merger,
has assumed that the final executed Merger Agreement will not materially differ from the drafts of the Merger Agreement reviewed
by William Blair and has assumed that the Merger will be consummated on the terms described in the Merger Agreement, without any
amendment or waiver of any material terms or conditions by the Company. Key Assumptions Underlying Our Review and Analysis 3
Transaction Overview
William Blair CONFIDENTIAL
Summary of Transaction Process Since June 20, 2024 „P On June 20, 2024, William Blair gave its review of strategic alternatives
to the Special Committee „P On June 28, 2024, a 13D was filed by Kumarakulasingam Suriyakumar (¡§Suri¡¨)
and the associated buyer group (collectively, the ¡§SABON Party¡¨), representing approximately 19.6% in aggregate
ownership per reported figures in 13D filing(1)(2) ¡V 13D disclosed details of the initial offer, including offer price
of $3.25 per share ¡V On July 19, 2024, an amended 13D was filed by the SABON Party disclosing that the buyer group has
entered into a Consortium Agreement with regard to a potential transaction „P Between July and August 2024, outreach was
conducted to 13 strategic buyers and 9 financials sponsors (22 parties in total) to gauge potential interest in ARIAL(3) ¡V
4 strategic buyers and 3 financial sponsors executed NDAs and were granted access to the virtual data room ¡V No proposals
were received through initial bid date of July 30, 2024 ¡V One strategic buyer requested and was granted a bid date extension
to August 5, 2024, but subsequently did not submit a bid for ARIAL ¡V On August 2, 2024, ARIAL received an inbound interest
from a sponsor-backed strategic who was not originally included in the outreach; the party signed the NDA and subsequently declined
after initial diligence ¡V On August 7, 2024, ARIAL received an inbound interest from a separate sponsorbacked strategic,
who was not originally included in the outreach; the party signed the NDA and subsequently declined after initial diligence „P
Rounds of exchanges during course of Merger Agreement negotiations in July and August led SABON party to increase purchase price
from initial offer of $3.25 per share to Merger Consideration of $3.40 per share (1) Other members of buyer group include Suriyakumar
Family Trust, Shiyulli Suriyakumar 2013 Irrevocable Trust, Seiyonne Suriyakumar 2013 Irrevocable Trust, Dilantha Wijesuriya, Jorge
Avalos, Rahul Roy and Sujeewa Sean Pathiratne. (2) Ownership calculation for 13D purposes reflects common shares and all dilutive
securities that are vested or expected to vest within 60 days. (3) Reflects 19 parties contacted by William Blair, and 3 inbound
parties following the 13D filing. Process Summary Commentary Parties 7 Signed NDA Total Parties 22 Contacted 0 Bids 4
William Blair CONFIDENTIAL
Transaction Summary Term Description Acquiror „P SABON Party Merger Consideration „P $3.40 per share in cash „P
Pursuant to the terms of and subject to the conditions set forth in the Merger Agreement, Merger Sub will be merged with and into
the Company and the holders of the Company Common Stock (other than Rollover Shares and Dissenting Shares) will be entitled to
receive the Merger Consideration Transaction Structure; Consideration „P Suri, Suriyakumar Family Trust, Shiyulli Suriyakumar
2013 Irrevocable Trust, Seiyonne Suriyakumar 2013 Irrevocable Trust, Dilantha Wijesuriya, Jorge Avalos, Rahul Roy and Sujeewa
Sean Pathiratne (¡§Rollover Stockholders¡¨) are rolling over shares, representing approximately 19.6% in
aggregate ownership per reported figures in 13D filing(1) Rollover Stockholders „P Parent termination fee equal to $750,000
„P Company termination fee equal to $5,277,367 Termination Fees „P Customary no-solicitation provisions, provided
that ARIAL can accept superior proposals subject to the payment of the Company termination fee and other customary conditions
„P All necessary corporate approvals (other than required shareholder approvals) are assumed to have been obtained prior
to signing the Merger Agreement Fiduciary Out Financing Commitment „P Subject to terms of equity and debt commitment letters
„P Rollover Stockholders agree to vote their respective shares of the Company¡¦s common stock in favor of the
adoption of the Merger Agreement and the consideration of the transactions contemplated by the Merger Agreement Rollover Stockholders
Voting Agreement „P Receipt of the Company stockholder approval ¡V Requires majority shareholder approval inclusive
of Rollover Stockholders „P Expiration of all applicable antitrust waiting periods, if any „P Other customary closing
conditions for a one-step merger Closing Conditions Sources: Draft Merger Agreement dated August 27, 2024. (1) Ownership calculation
for 13D purposes reflects common shares and all dilutive securities that are vested or expected to vest within 60 days. 5
William Blair CONFIDENTIAL
Valuation Summary Valuation Summary ($ in millions, except per share figures) Implied Premiums(5) Offer Price Per Share $3.40
Diluted Shares Outstanding(1) 44.348 Equity Value $151 Plus: Debt(2) (60) Less: Cash(2) (50) Plus: Minority Interest(2) (1) Implied
Enterprise Value $162 Enterprise Value Multiple ARIAL Metric Statistics LTM Adj. EBITDA(3) $38 4.3x CY 2024E Adj. EBITDA –
Management Plan(4) $37 4.4x CY 2025E Adj. EBITDA – Management Plan(4) $35 4.6x Sources: Management Plan forecast as of August
1, 2024. SEC filings and FactSet as of August 26, 2024. Note: Company reported Adj. EBITDA represents a non-GAAP financial measure
calculated as: Net Income attributable to the Company (as reported in Company disclosures) plus interest expense, taxes, depreciation
and amortization, stock-based compensation, and other non-recurring adjustments. Net Income attributable to the Company reflects
reduction for income/(loss) associated with noncontrolling interest, which is not added back to Adj. EBITDA given non-material
impact. (1) Diluted shares outstanding calculated based on 43,249,749 common shares and 4,532,264 in-the-money options at a weighted-average
strike price of $2.58 as of August 1, 2024, per management. Out-of-the money options totaling 1,993,081 are excluded. (2) Per
ARIAL balance sheet as of June 30, 2024. (3) LTM as of June 30, 2024. (4) Reflects Management Plan forecast as of August 1, 2024.
See page 9 herein for summary P&L forecast detail. (5) Premium calculated based on Merger Consideration of $3.40 per share
compared to ARIAL’s closing share price per FactSet on dates noted. Days prior based on calendar days. (6) 13D with details
of initial offer filed post-market close on June 28, 2024. (6) Undisturbed Premium To: Date Price Premium One Day Prior 6/28/2024
$2.64 28.8% One Week Prior 6/21/2024 $2.60 30.8% One Month Prior 5/28/2024 $2.73 24.5% 60 Days Prior 4/29/2024 $2.67 27.3% 90
Days Prior 3/30/2024 $2.77 22.7% 180 Days Prior 12/31/2023 $3.28 3.7% One Year Prior 6/28/2023 $3.07 10.7% 6
ARIAL Situation Overview
and Financial Information
William Blair CONFIDENTIAL
Sources: Bloomberg, FactSet and SEC filings as of August 26, 2024. (1) Diluted shares outstanding calculated based on 43,249,749
common shares and 2,964,632 in-the-money options at a weighted-average strike price of $2.24 as of August 1, 2024, per management.
Out-of-the money options totaling 3,560,713 are excluded. (2) Diluted shares outstanding calculated based on 43,249,749 common
shares and 1,909,682 in-the-money options at a weighted-average strike price of $2.10 as of August 1, 2024, per management. Out-of-the
money options totaling 4,615,663 are excluded. (3) Net debt includes $40M of revolver, $20M of finance leases, $50M of cash and
cash equivalents, and $1M of minority interest as of June 30, 2024. (4) Relative to undisturbed share price date of June 28, 2024.
(5) Trading information based on trading days and relative to undisturbed share price of $2.64 on June 28, 2024. (6) LTM as of
June 30, 2024. (7) Reflects Management Plan forecast as of August 1, 2024. ARIAL Trading Snapshot Share Price Performance –
Last Three Years Price/share Volume (M) Current Pricing Info (in millions, except share price) Price 8/26/2024 $3.02 Diluted Shares
Outstanding (M)(1) 44.013 Equity Value $133 Net Debt(3) 11 Enterprise Value $144 Undisturbed Share Price Performance(4) 1 Month
% Change (3.3%) 3 Month % Change (4.7%) 6 Month % Change (15.9%) Current Valuation Multiples EV / LTM Adj. EBITDA(6) 3.8x EV /
CY 2024E Adj. EBITDA – Management(7) 3.9x EV / CY 2025E Adj. EBITDA – Management(7) 4.1x ADTV ($000’s) VWAP
Undisturbed Average Volume 30 Trading Days(5) $220 $2.68 60 Trading Days(5) $233 $2.69 90 Trading Days(5) $299 $2.68 SABON Party
Offer: $3.40 6/28/2024: Undisturbed share price of $2.64 Undisturbed Valuation Multiples EV / LTM Adj. EBITDA(6) 3.4x EV / CY
2024E Adj. EBITDA – Management(7) 3.4x EV / CY 2025E Adj. EBITDA – Management(7) 3.6x Undisturbed Pricing Info (in
millions, except share price) Price 6/28/2024 $2.64 Diluted Shares Outstanding (M)(2) 43.700 Equity Value $115 Net Debt(3) 11
Enterprise Value $127 7
William Blair CONFIDENTIAL
Date of Report 2025E Adj. EBITDA 2024E Adj. EBITDA 2025E Revenue 2024E Revenue Premium to Undisturbed(1) Price Firm Analyst Rating
Target David P. Marsh Buy $4.70 78% $287 $289 N/A N/A 8/21/2024 Gregory Burns -- $6.00 127% $289 $297 $37 $39 8/8/2024 Summary
of Research Recommendations Sources: Wall Street Research as of August 26, 2024. (1) Undisturbed share price of $2.64 as of June
28, 2024. ($ in million, except per share data) 8
William Blair CONFIDENTIAL
ARIAL . Management Plan (August 2024) CY 2021A . CY 2029E Summary Financials Sources: Management Plan forecast as of August 1,
2024. Note: Company reported Adj. EBITDA represents a non-GAAP financial measure calculated as: Net Income attributable to the
Company (as reported in Company disclosures) plus interest expense, taxes, depreciation and amortization, stock-based compensation,
and other non-recurring adjustments. Net Income attributable to the Company reflects reduction for income/(loss) associated with
noncontrolling interest, which is not added back to Adj. EBITDA given non-material impact. (1) Utilizes 29% tax rate per ARIAL
management. Excludes utilization of Federal Net Operating Losses. ($ in millions) Historicals Forecast CAGR 2021A 2022A 2023A
2024E 2025E 2026E 2027E 2028E 2029E 24E ] 29E Total Revenue $272 $286 $281 $288 $286 $289 $291 $293 $294 0.5% % YoY Growth (6.0%)
5.1% (1.7%) 2.3% (0.5%) 0.9% 0.7% 0.7% 0.5% Gross Profit $88 $96 $94 $97 $94 $95 $95 $96 $97 % Margin 32.2% 33.6% 33.6% 33.6%
32.7% 32.8% 32.8% 32.8% 32.8% Adj. EBITDA $42 $41 $38 $37 $35 $36 $36 $36 $36 % Margin 15.3% 14.3% 13.6% 12.9% 12.2% 12.3% 12.3%
12.3% 12.3% (-) Depreciation and Amortization (16) (16) (16) (16) (16) (16) (-) Stock-Based Compensation and Other (3) (3) (3)
(3) (3) (3) EBIT $18 $16 $17 $17 $17 $17 % Margin 6.4% 5.7% 5.8% 5.8% 5.9% 5.9% (-) Taxes at Effective Rate(1) (5) (5) (5) (5)
(5) (5) NOPAT $13 $12 $12 $12 $12 $12 (+) Depreciation and Amortization 16 16 16 16 16 16 (-) Capital Expenditures (13) (9) (9)
(9) (9) (9) (-) Pro Forma Additional Capitalized Leases (6) (8) (8) (8) (8) (8) (-) Increase / (Decrease) in NWC 1 1 0 0 0 0 Unlevered
Free Cash Flow $12 $11 $11 $11 $11 $11 9
Valuation Analyses
William Blair CONFIDENTIAL
Summary of Valuation Analyses „P Selected Public Companies Analysis ¡V Trading multiple analysis based on a total
of six publicly traded companies in the printing and promotional marketing sectors with similar business models or financial profiles
that William Blair deemed relevant „P Selected Transactions Analysis ¡V Transaction multiple analysis based on a total
of ten publicly available transactions in the printing and promotional marketing sectors with similar business models or financial
profiles that William Blair deemed relevant „P Discounted Cash Flow Analysis ¡V Utilized Management Plan forecast
to derive free cash flows for the Company based on a 9.5% ¡V 11.5% range of discount rates to determine the present values
of such cash flows. Estimated a terminal value by utilizing a perpetuity growth rate of 0.0% ¡V 2.0% „P Leveraged
Buyout Analysis ¡V Analyzed the purchase prices at which a leveraged buyout of ARIAL could occur based on a range of required
rates of return of 18.0% ¡V 22.0% and LTM Adj. EBITDA exit multiples ranging from 3.5x ¡V 5.5x „P M&A Premiums
Paid Analysis ¡V Reviewed the premiums derived by comparing the per share equity consideration paid to the closing price
of the target stock one day, one week and one month prior to transaction announcement. Premiums were then compared against 324
public North America target transactions across all industries since January 1, 2015 with transaction equity values ranging from
$100M ¡V $300M 10
Selected Public Companies
Analysis
William Blair CONFIDENTIAL
Methodologies and Assumptions „P Identified six publicly traded companies in the printing and promotional marketing sectors
with similar business models or financial profiles that William Blair deemed relevant „P Calculated relevant operating and
financial metrics and the following relevant multiples and compared them to the similar multiples for ARIAL at the current enterprise
value and implied transaction value: ¡V Enterprise Value / CY 2024E Adj. EBITDA ¡V Enterprise Value / CY 2025E Adj.
EBITDA Selected Public Companies ($ in millions) Enterprise Value / CY 2025E Adj. EBITDA CY 2024E Adj. EBITDA Enterprise Company
Equity Value Value $2,438 $3,870 8.0x 7.4x 1,103 1,787 5.1x 5.0x 1,030 1,062 2.9x 2.5x 931 2,476 6.1x 5.8x 612 488 6.1x N/A 254
786 3.3x 3.3x Maximum $2,438 $3,870 8.0x 7.4x Median 981 1,425 5.6x 5.0x Mean 1,061 1,745 5.3x 4.8x Minimum 254 488 2.9x 2.5x
Selected Public Companies Analysis Sources: SEC filings and FactSet as of August 26, 2024. Closing price data as of August 26,
2024. Note: Projections reflect Wall Street consensus estimates. (1) Cimpress, Ennis and Transcontinental metrics calendarized
based on Fiscal Year end of June, February and October, respectively. (1) (1) (1) 11
William Blair CONFIDENTIAL
CY 2023A – CY 2025E Revenue Growth Selected Public Companies Performance Metrics ARIAL Sources: SEC filings and FactSet
as of August 26, 2024. Note: Projections reflect Wall Street consensus estimates, unless otherwise stated. Closing price data
as of August 26, 2024. (1) Cimpress, Ennis and Transcontinental metrics calendarized based on Fiscal Year end of June, February
and October, respectively. (2) Management Plan forecast as of August 1, 2024. Selected Public Companies Management Plan(2) (1)
(1) (1) 12
William Blair CONFIDENTIAL
CY 2024E Adj. EBITDA Margin Selected Public Companies Performance Metrics (cont’d) Selected Public Companies CY 2025E Adj.
EBITDA Margin ARIAL Management Plan(2) Management Plan(2) Selected Public Companies ARIAL Sources: SEC filings and FactSet as
of August 26, 2024. Note: Projections reflect Wall Street consensus estimates, unless otherwise stated. Closing price data as
of August 26, 2024. (1) Cimpress, Ennis and Transcontinental metrics calendarized based on Fiscal Year end of June, February and
October, respectively. (2) Management Plan forecast as of August 1, 2024. (1) (1) (1) (1) (1) (1) 13
William Blair CONFIDENTIAL
3.6x 4.6x 3.4x 4.4x EV / CY 2024E Adj. EBITDA Selected Public Companies Valuation Metrics Selected Public Companies EV / CY 2025E
Adj. EBITDA ARIAL Implied Undisturbed Multiple (Management Plan)(3) Implied Transaction Multiple (Management Plan)(4) Selected
Public Companies ARIAL Sources: SEC filings and FactSet as of August 26, 2024. Note: Projections reflect Wall Street consensus
estimates, unless otherwise stated. Closing price data as of August 26, 2024, unless otherwise noted. (1) Cimpress, Ennis and
Transcontinental metrics calendarized based on Fiscal Year end of June, February and October respectively. (2) Management Plan
forecast as of August 1, 2024. (3) ARIAL transaction multiple based on Enterprise Value of $127M as of June 28, 2024. (4) ARIAL
transaction multiple based on Enterprise Value of $162M. Implied Undisturbed Multiple (Management Plan)(3) Implied Transaction
Multiple (Management Plan)(4) (2) (1) (1) (1) (1) (1) (1) (2) 14
William Blair CONFIDENTIAL
($ in millions) ARIAL Range of Selected Public Companies Implied ARIAL Transaction Valuation Multiple Metric Multiple Min. Median
Mean Max. Enterprise Value / CY 2024E Adj. EBITDA Management $37 4.4x 2.9x 5.6x 5.3x 8.0x Enterprise Value / CY 2025E Adj. EBITDA
Management $35 4.6x 2.5x 5.0x 4.8x 7.4x Selected Public Companies Analysis Summary Source: SEC filings and FactSet as of August
26, 2024. Note: Projections reflect Wall Street consensus estimates, unless otherwise stated. (1) ARIAL transaction multiple based
on Enterprise Value of $162M. (2) Management Plan forecast as of August 1, 2024. (1) (2) (2) 15
Selected Precedent
Transactions Analysis
William Blair CONFIDENTIAL
Methodologies and Assumptions „P Identified ten publicly available transactions in the printing and promotional marketing
sectors with similar business models or financial profiles that William Blair deemed relevant „P Compared the following
multiple for each transaction to the multiple for ARIAL at the implied transaction value: ¡V Enterprise Value / LTM Adj.
EBITDA Selected Precedent Transactions Analysis 16
William Blair CONFIDENTIAL
Selected Precedent Transactions (3) (5) (1)(2) Sources: SEC filings, company disclosures, press releases and FactSet as of August
26, 2024. Note: LTM based on most recently available publicly disclosed historical 12-month period at the time of announcement.
(1) Pension-adjusted multiples. (2) 3.1x multiple based on 2020E EBITDA of $144 million including normalization for cost savings
(for completed or announced plant closures) and COVID-19 as provided in company filings. Multiple would be 4.2x based on estimated
2020E EBITDA of $105 million and normalization for COVID-19 only as provided in company filings. (3) LTM represents the last twelve
months through October 2017 per the 8-K filed by Steel Connect on December 18, 2017. (4) Values reflect the revised offer in July
2013. (5) LTM represents 2012 figures per the 8-K filed by Quad/Graphics on January 22, 2013. 4.9x multiple includes $97 million
payment for current assets in excess of working capital requirements. Excluding payment, multiple would be 3.1x. (1) ($ in millions)
Date Ann. Target Acquiror Enterprise Value Enterprise Value / LTM Adj. EBITDA Dec-21 R.R. Donnelley & Sons Company Chatham
Asset Management $2,291 5.8x Sep-20 LSC Communications Atlas Holdings LLC 440 3.1x Jul-20 InnerWorkings HH Global 302 5.5x Dec-17
IWCO Direct Steel Connect 476 5.8x Dec-13 Valassis Communications Harland Clarke 1,839 6.7x Oct-13 Consolidated Graphics R.R.
Donnelley & Sons Company 719 5.5x Aug-13 WorkflowOne Standard Register 218 6.3x Apr-13 American Greetings Corporation Weiss
Family 847 3.9x Oct-12 Vertis Quad/Graphics 267 4.9x Aug-12 SuperMedia Dex One Corporation 1,477 2.5x 17 (4)
William Blair CONFIDENTIAL
($ in millions) ARIAL Range of Selected Transactions Implied ARIAL Transaction Valuation Multiple Metric Multiple Min. Median
Mean Max. Enterprise Value / LTM Adj. EBITDA Actual $38 4.3x 2.5x 5.5x 5.0x 6.7x Precedent Transactions Summary (1) (2) Sources:
SEC filings, company disclosures, press releases and FactSet as of August 26, 2024. (1) ARIAL transaction multiple based on Enterprise
Value of $162M. (2) ARIAL LTM Adj. EBITDA as of June 30, 2024. 18
Discounted Cash Flow
Analysis
William Blair CONFIDENTIAL
Implied Equity Value per Share(2) Discounted Cash Flow Analysis Assumptions Sensitivity Analyses „P William Blair utilized
ARIAL management projections to calculate unlevered free cash flows for the years ending December 31, 2024 through December 31,
2029 „P Valuation date of June 30, 2024 and utilizes a mid-year discount convention ¡V Balance sheet figures as of
June 30, 2024 „P Estimated a terminal value by utilizing perpetuity growth rate range of 0.0% to 2.0% terminal year unlevered
FCF „P A range of discount rates of 9.5% to 11.5% was selected and used to calculate a present value of the free cash flows
and the terminal value „P Assumes tax rate of 29.0%(1) „P Assumes PV of Federal NOL of $9M Sources: Management Plan
forecast as of August 1, 2024. (1) Effective tax rate per management. (2) Diluted shares outstanding calculated based on 43,249,749
common shares and 6,525,345 options at a weighted-average strike price of $3.27 as of August 1, 2024, per management. Out-of-the
money options are excluded. Consideration per Share: $3.40 Perpetuity Growth Rate $3 0.0% 1.0% 2.0% 9.5% $2.93 $3.15 $3.41 10.5%
2.68 2.85 3.06 11.5% 2.47 2.61 2.77 Discount Rate 19
Leveraged Buyout Analysis
William Blair CONFIDENTIAL
Leveraged Buyout Analysis Implied Offer Price Sources: Management Plan forecast as of August 1, 2024. (1) Effective tax rate per
management. Utilizes NOLs to offset tax liability during the projection period. (2) 2029E Adj. LTM Adj. EBITDA of $37M (includes
$1M public company cost savings). (3) Diluted shares outstanding calculated based on 43,249,749 common shares and 6,525,345 options
at a weighted average strike price of $3.27as of August 1, 2024 per management. Out-ofthe- money options are excluded. „P
William Blair utilized ARIAL forecasts to derive free cash flows for the years ending December 31, 2024 through December 31, 2029
„P William Blair analyzed the value at which a leveraged acquisition of ARIAL could occur and yield an IRR between 18.0%
and 22.0% for a potential investor „P Valuation and balance sheet figures as of June 30, 2024 „P Assumes total net
debt of $85M (2.25x LTM Adj. EBITDA): Unitranche at SOFR+400 „P Estimated an exit value by utilizing an LTM Adj. EBITDA
multiple of 3.5x to 5.5x applied to CY 2029E Adj. EBITDA of $37M „P Analysis reflects $1M of annual public company cost
savings „P Assumes tax rate of 29.0%(1) „P Assumes a management option pool of 10% (2,3) Assumptions Sensitivity Analyses
Consideration per Share: $3.40 Implied Offer Price at 20% IRR (For Reference Only) Consideration per Share: $3.40 (2,3) 20 2029E
LTM Adj. EBITDA Multiple 3.5x 4.5x 5.5x 2.25x $2.43 $2.71 $2.98 3.00x $2.76 $3.03 $3.30 3.75x $3.03 $3.30 $3.57 Total Net Leverage
2029E LTM Adj. EBITDA Multiple 3.5x 4.5x 5.5x 18.0% $2.53 $2.83 $3.14 20.0% $2.43 $2.71 $2.98 22.0% $2.34 $2.60 $2.85 IRR
M&A Premiums Paid
Analysis
William Blair CONFIDENTIAL
Implied Premium Premiums Paid Data Percentile Period @ $3.40/share 10th 20th 30th 40th 50th 60th 70th 80th 90th One Day Prior
28.8% (0.9%) 10.2% 18.8% 26.1% 35.6% 42.8% 53.4% 68.4% 106.0% One Week Prior 30.8% (0.9%) 10.6% 21.1% 28.8% 38.1% 46.7% 57.1%
72.5% 105.6% One Month Prior 24.5% 1.8% 13.0% 23.0% 30.7% 37.8% 49.3% 63.8% 78.8% 113.7% Methodologies and Assumptions „P
William Blair analyzed 324 public North American target transactions across all industries with transaction equity values between
$100 ¡V $300 million that were announced since January 1, 2015. „P William Blair compared the price of each transaction
to the closing price of the target stock one day, one week and one month prior to the announcement of the transaction „P
William Blair then compared the range of premiums calculated from that universe to the premiums implied by the Merger M&A
Premiums Paid Analysis Sources: Dealogic transaction data through August 26, 2024. Premiums data as of August 26, 2024. Market
data as of August 26, 2024. (1) Implied premium based on Merger Consideration of $3.40 per share. Relative to undisturbed share
price of $2.64 as of June 28, 2024. (1) 21
Exhibit (c)(iv)
Project
Arial Business Plan Review and Forecast June 2024
Disclaimer
– Important information regarding this Report This report (“Report”) was prepared by AlixPartners, LLC (“AlixPartners”)
exclusively for the benefit and internal use of Arc Document Solutions Inc (the “Company”). This Report is confidential
and subject to the confidentiality provisions of the agreement between AlixPartners and the Company dated May 17, 2024. No person
other than the Company or person who has signed and returned to AlixPartners a Report Access Letter (a “Third Party”)
is authorized to have access to this Report. This Report and its contents are not to be referred to, excerpted, or quoted, in
whole or in part and with or without attribution to AlixPartners, in any prospectus, registration statement, offering circular,
public filing, presentation, loan document, or other agreement or document without the express written consent of AlixPartners.
In addition, this Report and its contents may not be reproduced or disseminated to any Third Party, or used for any other purpose
(other than for the internal use of the Company), at any time or in any manner, without the express prior written consent of AlixPartners.
This Report is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by
AlixPartners which forms part of this Report. Recipients of this Report accept that they will make their own investigation, analysis
and decision relating to a possible transaction or transactions and/or matter related to such and will not use or rely upon this
Report to form the basis of any such decisions. AlixPartners expresses no view as to the accuracy, completeness or likelihood
of the Company’s business plan, scenarios, projections or forecasts contained in this Report. This Report and the Company
business plan, scenarios, projections or forecasts are subject to important risk factors that are identified and discussed throughout
this Report, and particularly in the Risk section identified at the end of this report. This Report is subject to those risk factors,
which must be reviewed and considered by any person reviewing this Report. AlixPartners makes no representation or warranty regarding
any actions the Company may take in reliance on or in reference to matters presented in this Report. Accordingly, no liability
or responsibility whatsoever is accepted by AlixPartners for any loss howsoever arising from any use of, or in connection with,
this Report. The information in this Report reflects conditions and the views of AlixPartners as of the date of this Report, all
of which are subject to change. AlixPartners undertakes no obligation to update or provide any revisions to the Report to reflect
events, circumstances or changes that occur after the date this Report was prepared. In preparing this Report, AlixPartners has
relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public
sources, from the Company, or which was otherwise provided to us. AlixPartners has not audited or verified the data provided by
the Company or any other data reviewed in connection with the preparation of this Report. Accordingly, AlixPartners cannot and
does not express an opinion on the financial information and does not assume any responsibility for the accuracy or correctness
of the projected financial or other data, information and assessments upon which this Report is based. This Report may be based,
in whole or in part, on projections or forecasts of future events. A forecast, by its nature, is speculative and includes estimates
and assumptions which may prove to be wrong. Actual results may, and frequently do, differ from those projected or forecast. Those
differences may be material. Items which could impact actual results include, but are not limited to, unforeseen micro or macro
economic developments, business or industry events, personnel changes, casualty losses, or the inability of the Company to implement
plans or programs. This Presentation is subject to the Disclaimer on page 2 of this Presentation This Presentation is strictly
confidential and issued on a non-reliance basis as set forth in the Disclaimer
Executive
Summary EXECUTIVE SUMMARY Over the course of the last four weeks, AlixPartners has assisted management to develop a five-year
forecast by analyzing data provided by management, discussing the business with select members of the management team, interviewing
subject matter experts, and reviewing external market and industry reports Overall, the five-year forecast projects revenue to
increase at a 0.8% CAGR from FY23 through FY29 as ARC’s transformation and shift to Digital Color Graphic Printing and Scanning
is projected to offset the declines in MPS, Plan Printing and Equipment & Supplies Digitization, shifts in consumer behavior
(e.g. work from home), changes to regulatory policies (e.g. counties allowing for digital blueprints vs. physical copies), are
all factors that have contributed to the historical revenue and projected declines in MPS and Plan Printing Digital Color Graphic
Printing and Scanning projected to grow at a 4.1% and 11.1% CAGR from FY23 through FY29, respectively, as ARC continues to focus
on these two growing market segments However, Digital Color Graphic Printing and Scanning are lower margin businesses as compared
to MPS and Digital Plan Printing, resulting in EBITDA to fall to 12.3% by FY29 from 13.6% in FY23 Risks exist to the forecast
that may materially affect ARC’s ability to achieve the revenue, cost and EBITDA projections outlined in the 5-year forecast
This Presentation is subject to the Disclaimer on page 2 of this Presentation This Presentation is strictly confidential and issued
on a non-reliance basis as set forth in the Disclaimer
Documents
reviewed and sources consulted BACKGROUND AND APPROACH For this assessment, AlixPartners was provided access to key members of
ARC’s management team and documents uploaded to the Virtual Data Room. The forecast is informed by this information and
external research on industry and market trends Interviews with ARC Management and Special Committee Jorge Avalos, CFO Dilo Wijesuriya,
COO Rahul Roy, CTO Brad Brooks, Committee Member Cheryl Cook, Committee Member Mark Mealy, Committee Member External Sources AlixPartners
conducted additional expert interviews with 3rd party sources to collect insights on market trends and competitive
landscape AlixPartners also consulted external industry and market reports to validate assumptions and confirm overall trends
Key Data (non-exhaustive) 2.2 – Location Gross Margin FY21-FY23, FY24 Q1 2.2 – International Revenue 2.5 – Management’s
3 Year Forecast and 3-year historical information with key drivers 2.5 – Federal NOLs with Expiration 2.6 – SG&A
Breakdown 2.8 – Forecast to Actuals 2.9 – MPS Contract Data 5.1 – Detail of Arc Locations and Key Lease Terms
6.2 – Direct Labor Headcount by Region 6.2 – Temporary Labor by Region Publicly reported financial information (10K/10Q)
This Presentation is subject to the Disclaimer on page 2 of this Presentation This Presentation is strictly confidential and issued
on a non-reliance basis as set forth in the Disclaimer
Approach
to forecasting BACKGROUND AND APPROACH AlixPartners reviewed the forecast provided by management and assessed it for completeness
The forecast included historical data for FY21-23 and one quarter of data for FY24 Monthly data for April ’24 and May ’24
was not provided at a detailed level, nor included in management’s forecast Due to inherent challenges in pulling data from
multiple sources, the AlixPartners team also reviewed a number of files with revenue and costs that did not tie completely to
the P&L Once datasets were received, that information was vetted for completeness and included as an input to this model AlixPartners
reviewed the methodology used in management’s forecast for FY24-FY26 and applied it, as applicable FY27 through FY29 forecast
was developed by extrapolating the projections from FY24-FY26 AlixPartners perspectives were informed by data trends, industry
reports, third party interviews and conversations with management This Presentation is subject to the Disclaimer on page 2 of
this Presentation This Presentation is strictly confidential and issued on a non-reliance basis as set forth in the Disclaimer
ARC
five-year P&L forecast BUSINESS PLAN FORECAST ARC five-year P&L forecast (in $USD ’000s) FY23A FY24F FY25F FY26F
FY27F FY28F FY29F CAGR Revenue Total Net Revenue $ 2 81,200 $ 2 84,512 $ 2 86,345 $ 2 88,962 $ 2 91,113 $ 2 93,028 $ 2 94,407
0.77% Cost of Sales Total Materials $ ( 58,338) $ ( 59,990) $ ( 60,285) $ ( 61,115) $ ( 61,618) $ ( 62,209) $ ( 62,673) 1.20%
% of Revenue 20.7% 21.1% 21.1% 21.1% 21.2% 21.2% 21.3% Total Labor $ ( 68,891) $ ( 73,501) $ ( 76,103) $ ( 77,243) $ ( 77,799)
$ ( 78,005) $ ( 78,201) 2.13% % of Revenue 24.5% 25.8% 26.6% 26.7% 26.7% 26.6% 26.6% Total Indirect $ ( 59,571) $ ( 56,996) $
( 56,344) $ ( 55,819) $ ( 56,234) $ ( 56,604) $ ( 56,870) -0.77% % of Revenue 21.2% 20.0% 19.7% 19.3% 19.3% 19.3% 19.3% Gross
Profit $ 94,400 $ 9 4,025 $ 9 3,613 $ 9 4,785 $ 9 5,462 $ 9 6,211 $ 9 6,664 0.40% % of Revenue 33.6% 33.0% 32.7% 32.8% 32.8% 32.8%
32.8% S&M $ ( 26,846) $ ( 27,406) $ ( 27,421) $ ( 27,718) $ ( 27,971) $ ( 28,197) $ ( 28,276) 0.87% % of Revenue 9.5% 9.6%
9.6% 9.6% 9.6% 9.6% 9.6% G&A $ ( 45,780) $ ( 45,491) $ ( 45,769) $ ( 46,263) $ ( 46,626) $ ( 46,957) $ ( 47,156) 0.49% % of
Revenue 16.3% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% EBT $ 12,621 $ 1 5,679 $ 1 4,987 $ 1 5,409 $ 1 5,521 $ 1 5,685 $ 1 5,847 3.87%
% of Revenue 4.5% 5.5% 5.2% 5.3% 5.3% 5.4% 5.4% Net Income $ 8 ,235 $ 1 1,067 $ 1 0,624 $ 1 0,925 $ 1 1,004 $ 1 1,120 $ 1 1,235
5.31% % of Revenue 2.9% 3.9% 3.7% 3.8% 3.8% 3.8% 3.8% EBITDA $ 38,119 $ 3 5,860 $ 3 5,020 $ 3 5,520 $ 3 5,690 $ 3 5,980 $ 3 6,226
-0.85% % of Revenue 13.6% 12.6% 12.2% 12.3% 12.3% 12.3% 12.3% *CAGR calculated from FY23 to FY29 Commentary Despite significant
headwinds in its legacy MPS and Plan Printing businesses, ARC’s transformation to Digital Color Graphic Printing and Scanning
& Imaging is projected to enable top-line growth through 2029 Opportunities exist to optimize ARC’s direct labor as
recent growth in Digital Color Graphic Printing and Scanning has resulted in higher labor costs to support that growth (25.2%
vs 22.5% for Color Printing and 54.8% vs 40.8% for Scanning) Nevertheless, unlike its legacy businesses, Digital Color Graphic
Printing and Scanning are lower margin businesses (~40-50% vs ~65%+ for the legacy businesses) ARC will need to continue to manage
its cost structure appropriately to maintain EBITDA above 12% This Presentation is subject to the Disclaimer on page 2 of this
Presentation This Presentation is strictly confidential and issued on a non-reliance basis as set forth in the Disclaimer
Revenue
projected to increase at a 0.8% CAGR through FY29 with an ongoing transformation of the business to focus on Color Graphic Printing
and Scanning Revenue FY23A, FY24 – FY29F (in $USD millions) Commentary • Overall revenue growth is driven by projected
increases in Color Graphic Printing and Scanning due to dedicated focus from management and general market trends • Growth
is being offset by steady projected declines in legacy business lines – MPS, Digital Plan Printing, DMS, and Equipment &
Supplies • While past efforts have been able to stabilize these business lines, regulatory requirement changes, post-Covid
office dynamics, and consumer behavior shifts to digitization in the office have made competing in these areas increasingly difficult
for ARC This Presentation is subject to the Disclaimer on page 2 of this Presentation This Presentation is strictly confidential
and issued on a non-reliance basis as set forth in the Disclaimer USINESS PLAN FORECAST
Forecasted
EBITDA decreases at a 0.8% CAGR from FY23-FY29, with a decrease in EBITDA as % of revenue due to lower margins in Digital Color
Printing and Scanning EBITDA FY23A, FY24 – FY29F (in $USD millions), and EBITDA Margin % Commentary ARC 5-year forecast
projects a decline in FY24 and FY25 total EBITDA as a % of revenue due to: a shift in segment mix towards lower margin businesses;
and ARC likely not fully achieving its FY24 $1.9M G&A optimization target FY26+ EBITDA as a % of revenue remains stable through
a focused reduction in direct labor expenses via cross-training and optimizing headcount in the declining businesses, as well
as through the continuation of ongoing S&M and G&A savings initiatives previously implemented by ARC This Presentation
is subject to the Disclaimer on page 2 of this Presentation 8 This Presentation is strictly confidential and issued on a non-reliance
basis as set forth in the Disclaimer
OPPORTUNITIES
& RISKS AlixPartners and ARC Management have identified risk factors which may materially impact the five-year forecast, of
which several notable ones are shared here Macroeconomic Technology Operating Environment Interest Rates: A reversal in current
trends, and a return towards a higher interest rate environment may result in a reduction in construction activity, directly putting
downwards pressure on plan printing revenue and indirectly putting pressure on other lines of business (management notes that
construction customers also purchase non-plan printing services). Wage Inflation: ARC currently employs low-skilled labor to support
its service center and scanning activities. An increase in state and/or federal minimum wage will place additional cost pressure
on the business. Technology Change: Increased advancements and/or commercial adoption of color printing and/or scanning technologies
may reduce customer demand for ARC’s services. • Digitization: Continued digitization within the economy may reduce
customer demand. Portions of small format color printing and large format color printing are moving into digital. Increased used
of digital data may further erode demand for in-office printing, and therefore MPS revenue. • Changes in laws related to
data privacy/security: ARC provides scanning services for customers with strict data privacy and security regulations (HIPPA,
ISO/IEC 27001); a change in regulation may impact ARC’s ability to provide these services. • Increasing Proportion
of “Boxes” for Scanning: There are two main customers for Scanning: large format scanning and “boxes”.
Management has noted that the increased direct labor costs seen in the business are partly attributed to the increased demand
of “box” scanning jobs. A continued inability to manage these labor costs will impact EBITDA. This Presentation is
subject to the Disclaimer on page 2 of this Presentation 9 This Presentation is strictly confidential and issued on a non-reliance
basis as set forth in the Disclaimer
©2024
AlixPartners, LLP.
Exhibit
107
CALCULATION
OF FILING FEE TABLES
Schedule
13E-3
(Form
Type)
ARC
Document Solutions, Inc.
TechPrint
Holdings, LLC
TechPrint
Merger Sub, Inc.
Kumarakulasingam
Suriyakumar
Dilantha
Wijesuriya
Jorge
Avalos
Rahul
Roy
Sujeewa
Sean Pathiratne
Shiyulli
Suriyakumar 2013 Irrevocable Trust
Seiyonne
Suriyakumar 2013 Irrevocable Trust
Suriyakumar
Family Trust
(Exact
Name of Registrant and Name of Person Filing Statement)
Table
1: Transaction Valuation
| |
|
Proposed Maximum
Aggregate Value of
Transaction
|
|
|
Fee Rate |
|
|
Amount of
Filing Fee
|
|
| Fees to be Paid |
|
$ |
150,765,603.08 |
(1) |
|
|
0.00014760 |
|
|
$ |
22,253.00 |
(2) |
| Fees Previously Paid |
|
$ |
0 |
|
|
|
|
|
|
$ |
0 |
|
| Total Transaction Valuation |
|
$ |
150,765,603.08 |
|
|
|
|
|
|
|
|
|
| Total Fees Due for Filing |
|
|
|
|
|
|
|
|
|
$ |
22,253.00 |
|
| Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| Total Fee Offsets |
|
|
|
|
|
|
|
|
|
$ |
22,253.00 |
(3) |
| Net Fee Due |
|
|
|
|
|
|
|
|
|
$ |
0 |
|
| (1) |
Aggregate number of securities to which transaction applies: As of September 1 1 , 2024, the maximum number of shares
of ARC Document Solutions, Inc. (“ARC”) common stock to which this transaction applies is estimated to be 47,782,013, which consists of (1) 42,528,504 shares of common stock entitled to receive the per share merger consideration of $3.40; (2)
721,245 shares of common stock underlying outstanding restricted stock awards, which may be entitled to receive the per share merger consideration of $3.40; (3) 4,532,264 shares of common stock underlying stock options granted under the ARC’s
2021 Incentive Plan, 2014 Stock Incentive Plan or 2005 Stock Plan that have an exercise price per share that is less than $3.40 (such options, the “In-the-Money Options”), which may be entitled to receive the per share merger consideration of
$3.40 minus the applicable exercise price. |
| |
|
| (2) |
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): Estimated solely for the purposes of calculating the filing fee, as of September 1 1 , 2024, the underlying value of the transaction was calculated
based on the sum of (1) the product of 42,528,504 shares of common stock and the per share merger consideration of $3.40; (2) the product of 721,245 shares of common stock underlying outstanding restricted stock awards and the per share
merger consideration of $3.40; and (3) the product of 4,532,264 shares of common stock underlying the In-the-Money Options and $0.82 (which is the difference between the per share merger consideration of $3.40 and the weighted average
exercise price of $2.58). In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying the sum calculated in the preceding sentence by 0.00014760.
|
| |
|
| (3) |
ARC previously paid $22,253.00 upon the filing of its Preliminary Proxy Statement on Schedule 14A on
September 1 1 , 2024 in connection with the transaction reported hereby.
|
Table
2: Fee Offset Claims and Sources
| |
|
Registrant or Filer
Name
|
|
|
Form or
Filing
Type
|
|
|
File
Number
|
|
|
Initial
Filing Date
|
|
|
Filing Date |
|
|
Fee
Offset Claimed
|
|
|
Fee Paid with
Fee Offset
Source
|
|
| Fee Offset Claims |
|
|
|
|
Schedule 14A |
|
|
001-32407 |
|
|
09/1 1 /2024 |
|
|
|
|
|
$ |
22,253.00 |
|
|
|
|
| Fee Offset Sources |
|
ARC Document Solutions, Inc. |
|
|
Schedule 14A |
|
|
001-32407 |
|
|
|
|
|
09/1 1 /2024 |
|
|
|
|
$ |
22,253.00 |
|
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