Violin Memory Should Be Sold

Clinton Group, Inc. and Imation Corp., both stockholders of Violin Memory, Inc.,  will provide a notice of their intention to nominate the following individuals to the company’s board of directors at the company’s 2016 annual meeting of stockholders:

• Ralph Schmitt, veteran chief executive of innovative technology companies and a turnaround expert, most recently leading the sale of OCZ Technology Group to Toshiba
• Michael Wall, veteran chief executive in the technology space with extensive storage industry experience and a turnaround expert, who most recently lead the sale of Amplidata, N.V. to Western Digital Corporation
• Alex Spiro, an attorney at Brafman and Associates, faculty member of Harvard Law School, and member of the board of directors of Imation, a publicly-traded global storage and information security company

“To be explicitly clear, the Clinton Group and Imation believe that Violin Memory should be sold to a strategic buyer well in advance of the 2016 Annual Meeting, and we will not impede the ongoing sale process in any way. At this point, we trust that the strategic sale process is moving toward a conclusion with the full support of the board and the executive team. Fortunately, a sale of the company can be successful despite what we view as a lack of sales execution. We continue to believe that the company’s technology is exceptional and essential to a number of potential large strategic buyers who intend on competing in flash-based storage. Looking at valuation multiples of acquired companies in the flash storage space – SolidFire, Whiptail and Virident; and trading multiples of public comparable companies (Nimble Storage and Pure Storage)- multi-party demand in an auction process can yield a significant premium to company’s stock price,” stated Joseph A. De Perio, senior portfolio manager, activist investments, Clinton Group. “That being said: our nomination of Messrs. Schmitt, Wall and Spiro serves as a safety net for shareholders dissatisfied with the performance of the existing management team and leadership of the company’s board. In the unlikely event that the company’s sale process is ongoing at the time of the 2016 annual meeting, our nominees pledge to complete the execution of the process in connection with ensuring that the company’s stockholders realize the full value of their investments.”

Editor: In a separate mail, we got this comment from Violin’s CEO Kevin DeNuccio: “Violin’s management team and board collectively own six percent of the company and are aligned with our shareholders in our desire to create value for the company. We are focused on improving our execution and completing our product transition to the Flash Storage Platform,  while also pursuing strategic alternatives to accelerate our opportunity. Our BOD currently consist of six current or former CEO/COOs and senior executives from storage industry legacy leaders from IBM, NetApp, and 3Par, which provide critical leadership to create value for all of our stakeholders.”