SEC Comment Letter for PROGRESS SOFTWARE (PRGS) — Apr 5, 2012
PROGRESS SOFTWARE CORP /MA
Date: April 5, 2012 · CIK: 0000876167 · Accession: 0000000000-12-017368
AI Filing Summary & Sentiment
Letter
A p r i l 5 , 2 0 1 2 Via E-mail Jeffrey C. Smith Starboard Value and Opportunity Master Fund Ltd 830 Third Avenue, 3rd Floor New York, NY 10022 Re: Progress Software Corporation Amendment No. 1 to Preliminar y Proxy Statement on Schedule 14A Filed April 3, 2012 by Starboard Value and Opportunity Master Fund Ltd et al. File No. 033-41752
Dear Mr. Smith: We have reviewed your filing and have the following comments. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter by amendi ng your filing, by providing the requested information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circ umstances or do not believe an amendment is appropriate, please tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we ma y have additional comments. We believe the Company is Deeply Undervalued and Its Current Market Price Fails to Reflect the Value of the Sum-of-its-Parts, page 6 1. We note your response to prior comment 4 re garding your supporting analysis for some of your opinions and assertions on pages 6 through 8. Please consider revising your proxy statement to include support for your assert ions or opinions, to the extent necessary to provide context to investors. 2. With respect to your EBS Public Comparable Companies Analysis, please revise to clarify whether TIBX, INFA, and PEGA are repr esentative of the public companies that most resemble the business of EBS. We note that only TIBX lists Progress Software as a competitor in its most recent annual report. Further, your response indicates that Enterprise value/Revenue is a generally ac cepted valuation method used by Wall Street
Jeffrey C. Smith Starboard Value and Opportunity Master Fund Ltd April 5, 2012 Page 2 research analysts and public market i nvestors to value unprofitable technology companies. Since TIBX, INFA, and PEGA are all profitable in their most recent fiscal year end, it is unclear whether this valuation method is still appropriate for comparison to the unprofitable bus iness of EBS.
The Nominees, page 11
3. We note your response to prior comment 3 that Messrs. Dale Fuller, Edward Terino, and John Mutch have no material relationships w ith the Starboard part icipants and their affiliates. Please revise to clarify whethe r Messrs. Fuller, Terino, and Mutch have been participants or director nominees in prior proxy contests involving the Starboard participants and their affiliates.
Please contact Edwin Kim, Attorney-Advisor, at (202) 551-3297 or, in his absence, Maryse Mills-Apenteng, Special Counsel, at ( 202) 551-3457 with any ques tions. If you require further assistance, you may cont act me at (202) 551-3503.
Sincerely,
/s/ David L. Orlic
David L. Orlic Special Counsel Office of Mergers and Acquisitions
cc: Via-Email
Steve Wolosky, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP
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A p r i l 5 , 2 0 1 2
Via E-mail
Jeffrey C. Smith Starboard Value and Opportunity Master Fund Ltd 830 Third Avenue, 3rd Floor New York, NY 10022
Re: Progress Software Corporation
Amendment No. 1 to Preliminar y Proxy Statement on Schedule 14A
Filed April 3, 2012 by Starboard Value and Opportunity Master Fund Ltd
et al.
File No. 033-41752
Dear Mr. Smith:
We have reviewed your filing and have the following comments. In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
Please respond to this letter by amendi ng your filing, by providing the requested
information, or by advising us when you will provide the requested response. If you do not believe our comments apply to your facts and circ umstances or do not believe an amendment is
appropriate, please tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
We believe the Company is Deeply Undervalued and Its Current Market Price Fails to Reflect
the Value of the Sum-of-its-Parts, page 6
1. We note your response to prior comment 4 re garding your supporting analysis for some
of your opinions and assertions on pages 6 through 8. Please consider revising your
proxy statement to include support for your assert ions or opinions, to the extent necessary
to provide context to investors.
2. With respect to your EBS Public Comparable Companies Analysis, please revise to
clarify whether TIBX, INFA, and PEGA are repr esentative of the public companies that
most resemble the business of EBS. We note that only TIBX lists Progress Software as a
competitor in its most recent annual report. Further, your response indicates that
Enterprise value/Revenue is a generally ac cepted valuation method used by Wall Street
Jeffrey C. Smith
Starboard Value and Opportunity Master Fund Ltd April 5, 2012 Page 2
research analysts and public market i nvestors to value unprofitable technology
companies. Since TIBX, INFA, and PEGA are all profitable in their most recent fiscal year end, it is unclear whether this valuation method is still appropriate for comparison to
the unprofitable bus iness of EBS.
The Nominees, page 11
3. We note your response to prior comment 3 that Messrs. Dale Fuller, Edward Terino, and
John Mutch have no material relationships w ith the Starboard part icipants and their
affiliates. Please revise to clarify whethe r Messrs. Fuller, Terino, and Mutch have been
participants or director nominees in prior proxy contests involving the Starboard
participants and their affiliates.
Please contact Edwin Kim, Attorney-Advisor, at (202) 551-3297 or, in his absence,
Maryse Mills-Apenteng, Special Counsel, at ( 202) 551-3457 with any ques tions. If you require
further assistance, you may cont act me at (202) 551-3503.
Sincerely,
/s/ David L. Orlic
David L. Orlic Special Counsel Office of Mergers and Acquisitions
cc: Via-Email
Steve Wolosky, Esq. Olshan Grundman Frome Rosenzweig & Wolosky LLP