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Coppersmith Capital Issues Letter To Alere Inc. Stockholders

Stocks in this article: ALR

Coppersmith Capital Management, LLC and the other participants in its proxy solicitation (collectively, “Coppersmith”), the fourth-largest stockholder of Alere, Inc. (NYSE: ALR) (“Alere”), owning approximately 7.3% of the shares outstanding, today issued the following letter to Alere stockholders:

Performance Requires Accountability: Vote to Enhance the Board’s Independence, Not to Endorse Management’s Influence

Don’t Settle for the Promise of Change: Send the Message that Accountability Does Not End at the Annual Meeting

Coppersmith’s Nominees Are Independent, Highly-Qualified and Endorsed by ISS and Glass Lewis


Dear Fellow Alere Stockholder:

Coppersmith Capital Management, LLC and the other participants in its proxy solicitation own approximately 7.3% of Alere, Inc., having each individually purchased additional stock since our last 13D filing on July 10, 2013. We have nominated three highly-qualified, independent candidates, Curt R. Hartman, Theodore E. Martin and Jerome J. Lande, for election to Alere’s board of directors (the “Board”) at the annual meeting of stockholders (the “Annual Meeting”) to be held next Wednesday, August 7, 2013. For the last nine months, Coppersmith has worked diligently to introduce real accountability and rigorous business analysis into Alere’s performance and strategy. Along the way we have heard from many of our fellow stockholders who have expressed support for the change and accountability we are seeking at Alere, for which we are very grateful.


As long-term investors interested only in improving Alere’s performance, we are pleased by the sequential improvements in the 2 nd quarter. The results announced yesterday demonstrate the opportunities at Alere when a management team actually faces consequences for poor performance and bad strategy. However, we caution our fellow stockholders to remember that one quarter does not make a trend and that reaping the ‘low-hanging-fruit’ is not a lasting turnaround. Long-term improvement will take long-term commitment to change and an ability to face the harder choices that will come later. These long-term challenges include the continued weakness in diagnostics organic growth (4.0% in the quarter and -0.8% over the last 12 months, including Triage, which has proved to be a recurring issue); operating margins which remain 550 basis points below 2009 levels; tepid new product revenues that continue to disappoint and the long-term role of Health Management, which reduced total company growth and operating margin in the 2 nd quarter by approximately 120 and 300 basis points, respectively. These are complex issues which will require sober detachment from past strategies and the strongest possible Board to counter-balance management. It is crucial that stockholders continue to demand accountability from Alere’s management and Board by electing Coppersmith’s nominees so that we can tackle Alere’s long-term challenges and create sustainable improvement.


We have always been firm believers in Alere’s potential, as much as we believe accountability and objective analysis are the ways to realize it. Unfortunately, as all long-term investors know, Alere’s track record over the last ten years is littered with strategy reversals and unrealized promises of margin improvement, enhanced growth, lower leverage and realized synergies. Under the harsh light of a proxy contest and only after poor feedback from stockholders and the endorsement of Coppersmith’s nominees by both leading proxy advisors, ISS and Glass Lewis, Alere management has undergone a ‘deathbed conversion’. The result is more new promises to deliver improvements (several of which Coppersmith already proposed), such as a lower leverage target, more aggressive divestitures (including the consumer products joint venture and potentially components of Toxicology) and the introduction of partial margin targets. We are rightfully skeptical. Ask yourself: if Alere’s management and Board truly embraced these strategies of their own accord, why did they wait until 7 days before the Annual Meeting to announce them and only after difficult meetings with investors and rejection by both ISS and Glass Lewis?

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