Purple Innovation (PRPL) Announces Cooperative Framework with Coliseum Capital

Purple Innovation, Inc. (NASDAQ: PRPL) (“Purple” or the “Company”), a comfort innovation company known for creating the “World's First No Pressure® Mattress,” today announced that it has entered into a binding Memorandum of Understanding to establish a cooperative governance framework (the “Planned Cooperation Agreement”) with Coliseum Capital Management, LLC (together with its managed funds and accounts, “Coliseum”), the largest stockholder of the Company owning approximately 44% of its common stock.

Under the terms of the Planned Cooperation Agreement, which is anticipated to be executed promptly, the Purple Board of Directors (the “Board”) will be reconstituted to consist of eight directors. Five of the directors currently serve on the Board: Adam Gray, CEO Robert T. DeMartini, Gary T. DiCamillo, Claudia Hollingsworth and Dawn Zier. The three additional directors who will join were previously nominated by Coliseum in connection with the Company’s 2023 annual meeting of stockholders (the “2023 Annual Meeting”): S. Hoby Darling, R. Carter Pate and Erika Serow. Mr. Gray will become Board Chair, while Mr. DiCamillo will continue to serve as Lead Independent Director and will become Chair of the Nomination and Governance Committee.

Concurrently, Paul Zepf and Pano Anthos will resign as directors of the Company. Scott Peterson, who is a significant stockholder and has served as Board Observer since Purple’s September 2022 acquisition of Intellibed, will be a nominee on the Board’s slate of directors at the 2023 Annual Meeting in place of Dawn Zier, who previously announced her intention not to stand for reelection. The Company will recommend that stockholders vote in favor of its eight-person Board slate at its 2023 Annual Meeting. Coliseum has committed to vote in favor of the Company’s slate of directors.

Mr. DiCamillo said, “We are pleased to reach this agreement with Coliseum and share its enthusiasm in positioning the Company to fully focus on its business and generating value on behalf of all stakeholders. We also appreciate our longstanding partnership with Adam, the significant contributions he has made and his unwavering support of management.” Mr. DiCamillo continued, “Hoby, Carter, Erika and Scott are all highly credentialed, collaborative leaders who together bring significant experience helping to transform and scale companies. We are confident Purple will benefit from their fresh perspectives and skillsets.”

Mr. Gray added, “Throughout his first 16 months as CEO, Rob has demonstrated strong command for the business, inspiring Coliseum to invest meaningfully in support of the transformative vision he has established, the team he is building, and the key strategic and operating priorities he has pursued. I remain energized and excited to work alongside my director colleagues, both incumbent and new, to help Purple navigate its path towards maximizing value for all stockholders. Coliseum has been a supportive investor in Purple for as long as it has been a public company, and we are confident that our continued long-term, constructive engagement will benefit the Company and all of its stockholders.”

Mr. DiCamillo concluded, “On behalf of the entire Board, I would like to thank Paul and Pano for their service as directors of Purple. We are especially grateful for the sage advice and contributions of Paul, who has helped to spearhead the Company through its evolution since entering the public market in 2018. We believe the Company is well positioned to execute on our ‘path to premium’ strategy to drive sustainable growth.”

As part of the Planned Cooperation Agreement, Purple will redeem the shares of Proportional Representation Preferred Linked Stock that were previously distributed as a dividend on shares of Purple common stock and terminate its stockholder rights agreement. In addition, the Special Committee of the Board formed in September 2022 will be dissolved. Further, Coliseum will dismiss its litigation against the Company and has agreed to a customary standstill and other terms lasting through the Company’s 2024 annual meeting of stockholders, including a commitment not to exceed 44.7% ownership of the Company, subject to certain exceptions. The Memorandum of Understanding and, once it is finalized, the Cooperation Agreement between Purple and Coliseum, will be filed on a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.

Sidley Austin LLP and Morris, Nichols, Arsht & Tunnell LLP are acting as legal advisors to Purple. Debevoise & Plimpton LLP and Potter Anderson & Corroon LLP are acting as legal advisors to Coliseum.

About S. Hoby Darling

Mr. Darling has held several executive roles at Logitech International (NASDAQ: LOGI), including most recently as Head of its Sports and Human Performance business group. He was previously President, Chief Executive Officer and a member of the Board of Directors of Skullcandy (NASDAQ: SKUL), a leading consumer audio and technology company. Prior to joining Skullcandy, Mr. Darling held several senior roles at Nike, Inc. (NYSE: NKE), including as Global General Manager of Nike+ Digital Sport and as Head of Strategy and Planning for Nike Affiliates. Prior to Nike, he served as SVP, Strategic Development and General Counsel, at Volcom, Inc. (NASDAQ: VLCM), a leading manufacturer and marketer of consumer lifestyle products. Mr. Darling began his career as a corporate attorney at the global law firm of Latham & Watkins.

About R. Carter Pate

Mr. Pate is a member of the Board of Directors of OptionCare Health (Nasdaq: OPCH) and prior Chairman of the Board of BioScrip, Inc (NASDAQ: BIOS) which merged in 2019 with OptionCare Health. He is also Chairman of the Board of Riverbed Technologies. Previously, he was Chairman of the Board of Red Lion Hotels (NASDAQ: RLH) and a member of the Board of Directors of Advanced Emissions Solutions, Inc. (NASDAQ: ADES). He was the former CEO of ModivCare (NASDAQ: MODV), as well as the former CEO of MV Global Transportation, and for the bulk of his career was the Global Managing Partner of Health Care for PricewaterhouseCoopers among other roles during his career. Mr. Pate was named a NACD Board Leadership Fellow.

About Erika Serow

Ms. Serow is the Chief Marketing Officer of Bain & Company (“Bain”), responsible for Bain’s global marketing and communication teams, and a member of Bain’s Global Operating Council (Executive Leadership Team), where she serves on the Investment and Risk committees. Prior to this role, she was the Global President and US CEO for Sweaty Betty, a premium athletic apparel company. Ms. Serow began her career with a 20-year stint as a consultant at Bain, where she ultimately led the firm’s Retail practice in the Americas. She is a member of the Board of Directors of Lazydays Holdings (NASDAQ: LAZY).

About Scott Peterson

Mr. Peterson was most recently the Chairman of the Board, Chief Financial Officer and largest investor of Advanced Comfort Technologies, Inc. (“Intellibed”), a luxury mattress company which was acquired by Purple in August 2022. He also was the Chairman of the Board of Utah Capital Investment Corporation, a Utah based venture capital “Fund of Funds” through 2022. Previously, he served on the Board and as Audit Committee Chair for Mattson Technology, Inc. a NASDAQ traded semi-equipment manufacturing company, which was acquired in 2016. He spent the majority of his 32-year audit career with Ernst & Young LLP, the global professional services firm, from which he retired in 2011 as the Pacific Northwest Area Assurance (Audit) Managing Partner, based in the Silicon Valley.

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