SEATTLE, May 21, 2012 /PRNewswire/ -- Onvia (Nasdaq: ONVI), a leading provider of comprehensive government-business market intelligence, announced today that leading proxy advisory firm, Institutional Shareholder Services ("ISS"), has issued a report recommending to its clients that stockholders vote the WHITE proxy card to elect the Company's director nominees, Jeffrey C. Ballowe, Robert G. Brown and Michael E.S. Frankel, at Onvia's annual meeting of stockholders to be held on May 31, 2012. ISS' clients include institutional investors, mutual funds, pension funds and other fiduciaries. In addition, last week, Glass Lewis & Co. also recommended that stockholders vote FOR Onvia's director nominees on the WHITE proxy card, meaning that both of the leading proxy advisory firms have now advised Onvia's stockholders to vote the WHITE proxy card in support of Onvia's director nominees.
In recommending that stockholders vote the WHITE proxy card for the director nominees, ISS took note of the progress that Onvia has made in transforming itself into a provider of high-value solutions to a well-defined market rather than being a commodity provider of sales leads while also recognizing that the transformation will take a significant period of time to show its results. The ISS report, commenting on Onvia's transformation, stated:
- "Shareholders should recognize that the company transformed itself from a sales lead generator, which is more of a commodity business offering, to a high value-added database provider. This transformation will take considerable time to show its results. After 18 months some progress has been made at the operational level - the annual contract value per client for new clients has almost doubled – but in order to see the full effect of the turnaround plan more time will be needed." (ISS Proxy Report, May 18, 2012, Page 5).
The ISS report, commenting on the proposal that the dissident made to acquire the Company, stated:
- "Onvia's board is not against selling the company; however the board does not believe the timing is yet appropriate. The board recognizes that a sale may be one of the alternatives to capture additional value after the turnaround plan has been executed. The STG offer, however, does not lend itself as a reasonable starting point to begin a negotiation process, because it does not account for the additional value being created as the strategic plan is implemented." (ISS Proxy Report, May 18, 2012, Page 5).
- "The STG proposal is economically unappealing, based both on M&A metrics and the company's recent progress on its strategic plan under its new CEO. Despite offering a premium to the undisturbed market price, STG's offer compares poorly to precedent transactions in the sector on the key multiple of EV/EBITDA. Even if Onvia's shareholders wanted to sell the company, without waiting for the strategic plan to deliver additional value, comparable M&A transactions suggest STG's bid would be a poor starting point for negotiations. Therefore the board's rejection of the STG proposal appears to have been prudent, and a vote FOR the management nominees is warranted." (ISS Proxy Report, May 18, 2012, Page 6).