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Epiq defuses takeover battle in settlement with New Orleans investors

This is the second settlement between Epiq and the New Orleans investor group in 19 months. It prevents what would have been a proxy battle for the votes of shareholders over competing slates of directors.
This is the second settlement between Epiq and the New Orleans investor group in 19 months. It prevents what would have been a proxy battle for the votes of shareholders over competing slates of directors.

Another settlement between Kansas City, Kan.-based Epiq Systems Inc. and a New Orleans-based investor group has brought some peace to the company ahead of its shareholders meeting.

Epiq said Tuesday that it agreed to nominate to its board of directors three men selected by the investor group St. Denis J. Villere & Co. LLC.

Villere, a longtime owner of Epiq, with 13 percent of its shares, sued the legal services company in December and nominated a competing slate of six directors in an effort to take control.

Epiq also agreed that three of its current directors would step down this December, returning the board to its original size of nine members.

In turn, Villere agreed to drop its lawsuit against Epiq. It also will vote for the company’s new slate of directors, which will include the three it selected, and support any transaction that might arise from Epiq’s ongoing strategic review so long as it meets “certain criteria” and is approved by the board of directors.

“We expect the addition of the Villere nominees (and the departure of three legacy Epiq directors), combined with the two independent directors Epiq appointed in March, will materially improve Epiq’s corporate oversight,” analyst Peter Heckmann at Avondale Partners said in a note to clients.

Heckmann said other provisions of the settlement require Epiq to pay Villere $3.55 million for its litigation expenses.

Epiq and Villere have been in an increasingly public battle since 2014 when they reached a settlement that added one Villere-selected director to Epiq’s board. Epiq started its strategic review in November 2014.

That settlement unraveled, leading to the lawsuit.

“We believe this (new) agreement is a very positive outcome and will help drive enhanced value for Epiq’s shareholders,” Villere partner George Young said in Epiq’s announcement.

Epiq chief executive Tom Olofson said the settlement allows the company to “focus all our energy and resources on maximizing Epiq’s value for the benefit of shareholders.”

In addition to clearing the courtroom battle, the settlement avoids a battle over shareholder votes for the competing slates of directors, often called a proxy battle, ahead of the company’s annual meeting on Aug. 5.

Epiq has provided software and services to bankruptcy attorneys and has expanded its business of helping legal teams handle large amounts of documents gained in discovery phases of court cases. Its e-discovery business now accounts for two-thirds of its revenue.

Mark Davis: 816-234-4372, @mdkcstar

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