{
  "docId": "019f6b8f-155a-7627-ae9c-99e7272d705f",
  "docSlug": "jarvis-engine-capital-houghton-mifflin-harcourt-presentation-march-2022",
  "documentTitle": "Engine Capital Houghton Mifflin Harcourt Presentation March 2022",
  "authorId": "engine-capital-houghton-mifflin-harcourt-presentation-march-2022",
  "authorName": null,
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2022-03-01 00:00:00",
  "orientation": null,
  "aspectRatio": null,
  "pageNumber": 12,
  "pageCount": 21,
  "prevPage": 11,
  "nextPage": 13,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 8,
  "notes": "The slide uses boxed callouts to emphasize the conflict of interest fees ($75M) and the transaction success fee ($32M).",
  "elementsJson": null,
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019f6b8f-155a-7627-ae9c-99e7272d705f/12",
  "deckHref": "/decks/019f6b8f-155a-7627-ae9c-99e7272d705f",
  "deckJsonHref": "/decks/019f6b8f-155a-7627-ae9c-99e7272d705f.json",
  "deckAnchorHref": "/decks/019f6b8f-155a-7627-ae9c-99e7272d705f#slide-12",
  "components": [
    {
      "bbox": {
        "h": 0.11,
        "w": 0.91,
        "x": 0.04,
        "y": 0.24
      },
      "kind": "callout",
      "text": "\"In addition, during the two-year period prior to the date of its opinion, Evercore and its affiliates have advised / provided financial advisory or other services to Veritas for which Evercore received fees, in the aggregate, of approximately $75 million\"",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e0d83b10-c61a-4381-a87a-fba525aeb69c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.91,
        "x": 0.04,
        "y": 0.83
      },
      "kind": "callout",
      "text": "Evercore stands to earn a $32 million fee if this transaction is approved by shareholders",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "eff5bd2c-c79e-4c3f-ada7-b4de8e4230b0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.45,
        "x": 0.04,
        "y": 0.39
      },
      "kind": "list",
      "text": "The fairness opinion contains numerous mistakes, including:",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "71e69182-6a24-4d3f-96c6-0d8bd92ec3d1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.91,
        "x": 0.04,
        "y": 0.17
      },
      "kind": "list",
      "text": "Evercore, Houghton Mifflin's investment bank, is particularly conflicted in this transaction given its relationship with Veritas as stated in the Company's Schedule 14D-9",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9e58ef7d-d6cf-4304-98af-2f1e07020f8c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.37,
        "w": 0.88,
        "x": 0.07,
        "y": 0.44
      },
      "kind": "list",
      "text": "1. Evercore uses the company's net debt as of 3/31/2022 to derive different equity values in its public company trading analysis...\n2. In that same public company trading analysis, Evercore failed to include the tax attributes valuation of around $2 per share...\n3. Between the tax attributes (around $2 per share) and capitalizing the business at a low point in its cash generation seasonality (>$1 per share), the equity value calculated by Evercore in its public company trading analysis understates fair value by at least $3 per share\n4. In its public company trading analysis, Evercore did not consider the much higher multiples of education technology peers when considering the Adj. EBITDA metric\n5. In its discounted cash flow analysis, Evercore used discount rates ranging from 11.50% to 13.50%, which is materially higher than what public market investors use in this low interest rate environment",
      "attrs": null,
      "subkind": "numbered",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a5b6fdc5-0484-4059-8ac9-c68aa1497a0a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.27,
        "x": 0.19,
        "y": 0.92
      },
      "kind": "source-note",
      "text": "Source: Company's Schedule 14D-9, filed on March 7, 2022.",
      "attrs": null,
      "subkind": "source-note",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a52a8602-51b9-46c5-aee2-3ea7dc8e2bd3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.89,
        "x": 0.04,
        "y": 0.08
      },
      "kind": "title",
      "text": "Evercore is conflicted and its fairness opinion is riddled with mistakes",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9a8d1ba0-5ee9-481d-b94e-c3c3ed62a3d9",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "ceo-quote-contradiction",
      "slug": null,
      "matchId": "bf31994f-bbc5-47c9-b470-4425a4da1a7e",
      "evidence": "Using Schedule 14D-9 disclosures to expose Evercore's conflict of interest and $75M fee relationship with Veritas.",
      "confidence": 0.85
    }
  ],
  "arcBeats": [
    {
      "to": 14,
      "from": 6,
      "beatId": "c6917caa-12c6-425e-8da7-fcc510eea151",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The document highlights the flaws in the sales process and the undervaluation of the company",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}