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Legion Partners Files Definitive Proxy Statement and Issues Letter to OneSpan Shareholders

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Legion Partners Asset Management announced its nomination of four independent directors for OneSpan's Board to enhance value for shareholders. Beneficially owning approximately 6.9% of OneSpan's stock, Legion aims for significant Board refreshment, asserting the current directors lack relevant experience for the company’s cloud-first strategy. Key points include calls to monetize the Hardware business and a belief that effective changes could raise share valuations by 70%. Legion encourages stockholders to support its nominees to unlock stockholder value.

Positive
  • Legion Partners owns 6.9% of OneSpan, indicating significant shareholder interest.
  • Nomination of independent directors could bring fresh perspectives and relevant expertise.
  • Potential to increase share valuation by 70% through strategic business transformation.
Negative
  • Current Board has been resistant to value-enhancing proposals from Legion Partners.
  • Recent director additions lack necessary experience in cloud-first recurring revenue.
  • Past acquisitions overseen by the Board are described as questionable and have led to poor performance.

Legion Partners Asset Management, LLC, which, together with its affiliates (collectively, “Legion Partners”), beneficially owns 2,790,121 shares of common stock of OneSpan Inc. (“OneSpan” or the “Company”) (Nasdaq: OSPN), representing approximately 6.9% of the outstanding stock, today announced the filing of its definitive proxy statement and issued an open letter to stockholders in connection with its nomination of four highly-qualified independent directors for election to the Company’s Board of Directors (the “Board”) at the Company’s 2021 Annual Meeting of Stockholders (“Annual Meeting”): Sarika Garg, Sagar Gupta, Michael J. McConnell and Rinki Sethi. The Company has not set the date or time for the Annual Meeting.

The full text of the letter is available at www.ProtectOneSpan.com.

In the letter, Legion outlines its case for Board refreshment at OneSpan. Legion is the second-largest institutional stockholder of OneSpan and has repeatedly attempted to engage constructively with the Board and management team for years to help improve OneSpan’s persistently low valuation. Unfortunately, the Board has consistently dismissed several ideas to unlock stockholder value – ideas that Legion believes have widespread support amongst OneSpan’s stockholder base.

Key points highlighted in the letter include:

  • Over the past two years the Company has added new directors and seen the long overdue resignations of two long-tenured directors. Legion believes these incremental changes were only driven by its pressure for change and would not have occurred without this involvement. While Legion welcomes fresh perspectives, we find most of their recent additions generally lack relevant skillsets in cloud-first recurring revenue.
  • Even with these reactive steps, not enough has been done to alter the base of power in the boardroom and reverse the severe underperformance of OneSpan’s stock.
  • If the Company were to monetize the declining Hardware business and transform OneSpan into a pure play software company, we believe OneSpan shares would likely rerate closer to peer levels, or roughly 70% higher than current levels.
  • Stockholders should no longer trust the capital allocation abilities of a Board that has overseen and approved a long list of 13 questionable acquisitions, some of which were outright failures.
  • Of the four incumbent directors Legion is seeking to replace, three hold key leadership positions yet possess virtually no pertinent industry experience relevant to OneSpan’s go-forward strategy of becoming a cloud-first recurring revenue software company.
  • Legion believes its nominees, if elected, would bring unique and diverse perspectives to the Board and seek to work collaboratively with the remaining directors to explore all opportunities to unlock value for stockholders.

PLEASE VOTE FOR LEGION’S FOUR NOMINEES ON THE WHITE PROXY CARD TODAY

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About Legion Partners

Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, CA. Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world’s largest institutional and HNW investors.

FAQ

What is Legion Partners' stake in OneSpan (OSPN)?

Legion Partners owns approximately 6.9% of OneSpan's outstanding stock.

Who are the nominees proposed by Legion Partners for OneSpan's Board?

Legion Partners nominated Sarika Garg, Sagar Gupta, Michael J. McConnell, and Rinki Sethi for the Board of Directors.

What is Legion Partners' main argument for Board changes at OneSpan?

Legion argues that the current Board lacks the relevant expertise for transitioning to a cloud-first strategy and has overseen poor capital allocation.

How does Legion Partners suggest OneSpan could improve its stock valuation?

Legion believes that monetizing the declining Hardware business could potentially rerate OneSpan's shares by approximately 70%.

What actions has Legion Partners taken regarding OneSpan's governance?

Legion has filed a definitive proxy statement and issued an open letter urging stockholders to vote for its nominated directors.

OneSpan Inc.

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