SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
Leaf Group Ltd.
(Name of Issuer)
Common Stock, par value $0.0001 par value
(Title of Class of Securities)
52177G 102
(CUSIP Number)
Carolina Picazo
Spectrum Equity
One International Place
35th Floor
Boston, Massachusetts 02110
(617) 464-4600
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
August 31, 2020
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent.
* | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Spectrum Equity Investors V, L.P. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
WC | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
Delaware |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,756,688 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,756,688 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,756,688 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.2% | |||||
14. | Type of Reporting Person (See Instructions)
PN |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Spectrum Equity Associates V, L.P. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
AF | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
Delaware |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,756,688 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,756,688 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,756,688 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.2% | |||||
14. | Type of Reporting Person (See Instructions)
PN |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
SEA V Management, LLC | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
AF | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
Delaware |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,770,540 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,770,540 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,770,540 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.3% | |||||
14. | Type of Reporting Person (See Instructions)
OO |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Spectrum V Investment Managers Fund, L.P. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
WC | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
Delaware |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
13,852 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
13,852 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
13,852 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
0.1% | |||||
14. | Type of Reporting Person (See Instructions)
PN |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Brion B. Applegate | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
AF | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
United States of America |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,770,540 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,770,540 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,770,540 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.3% | |||||
14. | Type of Reporting Person (See Instructions)
IN |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Christopher T. Mitchell | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
AF | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
United States of America |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,770,540 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,770,540 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,770,540 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.3% | |||||
14. | Type of Reporting Person (See Instructions)
IN |
CUSIP No. 52177G 102
1. | Names of Reporting Persons.
Victor E. Parker, Jr. | |||||
2. | Check the Appropriate Box if a Member of a Group (See Instructions) (a) ☐ (b) ☒
| |||||
3. | SEC Use Only
| |||||
4. | Source of Funds (See Instructions)
AF | |||||
5. | Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)
☐ | |||||
6. | Citizenship or Place of Organization
United States of America |
Number of Shares Beneficially Owned by Each Reporting Person With
|
7. | Sole Voting Power
0 | ||||
8. | Shared Voting Power
2,770,540 | |||||
9. | Sole Dispositive Power
0 | |||||
10. | Shared Dispositive Power
2,770,540 | |||||
11. |
Aggregate Amount Beneficially Owned by Each Reporting Person
2,770,540 | |||||
12. | Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)
☐ | |||||
13. | Percent of Class Represented by Amount in Row (11)
10.3% | |||||
14. | Type of Reporting Person (See Instructions)
IN |
Explanatory Note
This Amendment No. 9 (this Amendment) amends and supplements the Schedule 13D filed with the Securities and Exchange Commission on June 22, 2020, as amended on June 29, 2020, July 10, 2020, July 13, 2020, July 16, 2020, July 27, 2020, July 29, 2020, August 13, 2020 and August 17, 2020, by the Reporting Persons (as amended from time to time, the Schedule 13D), relating to their beneficial ownership in Leaf Group Ltd. (the Issuer). Except to the extent set forth in this Amendment, all material information disclosed in the Schedule 13D remains unchanged. Capitalized terms used but not defined in this Amendment have the respective meanings set forth in the Schedule 13D.
Item 4. | Purpose of Transaction |
Item 4 of the Schedule 13D is hereby amended and supplemented to add the following:
On August 31, 2020, the Investors issued a press release commenting on recent media reports. A copy of the press release is attached hereto as Exhibit 11.
Item 5. | Interest in Securities of the Issuer |
Item 5(a) and (b) of the Schedule 13D are hereby amended and supplemented as follows:
The percentages set forth in this response are based on the 26,861,643 shares of common stock outstanding as of July 27, 2020, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 as filed with the SEC on July 31, 2020.
Based upon information provided to the Reporting Persons by the other Investors, the Investors collectively beneficially own an aggregate of 10,547,342 shares of common stock representing approximately 39.3% of the outstanding shares of common stock of the Issuer, and includes 1,836,718 shares beneficially owned by the Osmium Parties.
Item 7. | Material to be Filed as Exhibits |
Item 7 of the Schedule 13D is hereby amended and supplemented to add the following:
Exhibit 11 Press Release, dated August 31, 2020
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
Dated: September 1, 2020
Spectrum Equity Investors V, L.P. | ||||
By: | Spectrum Equity Associates V, L.P. | |||
its general partner | ||||
By: | SEA V Management, LLC | |||
its general partner | ||||
By: | /s/ Carolina Picazo | |||
Carolina Picazo | ||||
Authorized Signatory | ||||
Spectrum Equity Associates V, L.P. | ||||
By: | SEA V Management, LLC | |||
its general partner | ||||
By: | /s/ Carolina Picazo | |||
Carolina Picazo | ||||
Authorized Signatory | ||||
SEA V Management, LLC | ||||
By: | /s/ Carolina Picazo | |||
Carolina Picazo | ||||
Authorized Signatory | ||||
Spectrum V Investment Managers Fund, L.P. | ||||
By: | SEA V Management, LLC | |||
its general partner | ||||
By: | /s/ Carolina Picazo | |||
Carolina Picazo | ||||
Authorized Signatory |
* |
Brion B. Applegate |
* |
Christopher T. Mitchell |
* |
Victor E. Parker, Jr. |
*By: | /s/ Carolina Picazo | |
Carolina Picazo | ||
As attorney-in-fact |
This Schedule 13D was executed by Carolina Picazo on behalf of the individuals listed above pursuant to a Power of Attorney, a copy of which is attached as Exhibit 2.
EXHIBIT INDEX
Exhibit 1 | Joint Filing Agreement | |
Exhibit 2 | Power of Attorney | |
Exhibit 3 | Press Release and Letter to Board of Directors, dated June 29, 2020 | |
Exhibit 4 | Press Release and Letter to Board of Directors, dated July 10, 2020 | |
Exhibit 5 | Press Release and Letter to Board of Directors, dated July 13, 2020 | |
Exhibit 6 | Press Release, dated July 16, 2020 | |
Exhibit 7 | Press Release and Letter to Board of Directors, dated July 27, 2020 | |
Exhibit 8 | Press Release, dated July 29, 2020 | |
Exhibit 9 | Press Release and Letter to Board of Directors, dated August 12, 2020 | |
Exhibit 10 | Press Release, dated August 17, 2020 | |
Exhibit 11 | Press Release, dated August 31, 2020 |
Exhibit 11
Investor Group Owning Over 40% of Leaf Group Comments on Media Report Confirming that Companys Strategic Review Was a Sham Process
Sources Cited in Media Report Describe How Leaf Group Failed to Engage in a True, Good Faith Review
Parties Who Have Had or Currently Have Interest in Acquiring All or Parts of Leaf Group May Contact the Investor Group at www.LiberateLeaf.Group
LOS ANGELES, August 31, 2020 Investors owning more than 40% of Leaf Group Ltd. (Leaf Group or the Company) (NYSE: LEAF), which includes Osmium Partners LLC, PEAK6 Investments LLC, Boyle Capital Opportunity Fund, LP, Oak Management Corp., Generation Capital Partners II LP, Generation Partners II LLC, Spectrum Equity Investors V, L.P. and Spectrum V Investment Managers Fund, L.P. (together, the Investor Group), today issued the following statement commenting on an August 28th article published on www.CorpGov.com (Leaf Groups Stubborn Desire to Go it Alone)1.
This recent media report cites several sources who provide further damning evidence supporting our belief that Leaf Groups strategic review was a sham process. We urge all shareholders to read the full article, but several elements are worth noting here:
| The report cites one potential strategic buyer as indicating that the company broke many normal rules of conduct in a sale process, effectively ruling out the possibility of doing a deal of any kind. |
| According to that individual, There werent any chances to meet senior management to discuss details or access to a so-called data room, which normally serves to provide potential buyers with critical information that isnt given to the public. |
| Further, the article cites another person close to the Company as noting that Mr. Moriarty has shown a lack of interest in selling parts of the business in the past. |
| According to the article, that person also noted that Mr. Moriarty seemed to conduct himself like a controlling shareholder or imperial CEO despite the fact that Mr. Moriarty owns very little of Leaf Groups outstanding stock. |
| The report also reiterates, the so-called independent review of strategic alternatives was led by a director with ties to Mr. Moriarty and who, the Board has now admitted, was not independent. |
It is increasingly clear why the process did not yield a single offer for the whole company over 13 months an inconceivable outcome. Because buyers werent provided the opportunity to make an informed bid.
In light of these new revelations, we once again call on the Board to allow former directors two of whom are principals at investment firms that are participants in the Investor Group to disclose their first-hand observations regarding the strategic alternatives process.
Further, we again urge the Board to immediately terminate Sean Moriarty and refresh the Board with individuals chosen by Leaf Groups shareholders. Given the significant failings and apparent management interference with the strategic alternatives process, we also call upon Leafs directors to start a new process that will be overseen by an active, refreshed and objective Board.
We also note that any other party that had or has interest in acquiring all or parts of Leaf Group may contact the Investor Group at www.LiberateLeaf.Group.
About Osmium Partners
We seek to generate strong, risk-adjusted returns by investing in undervalued, small capitalization companies across equity markets. Our Osmium 8 research process is based on eight simple factors involving factors such as balance sheet strength, aligned interests, attractive reinvestment opportunities, a low valuation, and reasonable growth prospects. As engaged owners, we actively discuss corporate
1 | CorpGov, Leaf Groups Stubborn Desire to Go it Alone, August 28, 2020, https://corpgov.com/leaf-groups-stubborn-desire-to-go-it-alone/ |
strategy and capital structure with management teams and boards of directors. We prefer to conduct these discussions in private, but we will publicly debate important items with all shareholders when appropriate.
About PEAK6
PEAK6 uses technology to find a better way of doing things. The companys first tech-based solution was developed in 1997 to optimize options trading and, over the past two decades, the same formula has been used across a range of industries, asset classes and business stages to consistently deliver superior results. Today, PEAK6 seeks transformational opportunities to provide capital and strategic support to entrepreneurs and forward-thinking businesses, helping to unlock potential and activate what is into what ought to be. PEAK6s core brands include: PEAK6 Capital Management, Apex Clearing, National Flood Services and Evil Geniuses. Learn more at www.PEAK6.com or follow us on LinkedIn.
About Boyle Capital Opportunity Fund
Boyle Capital Opportunity Fund, LP is a value-oriented investment partnership. We manage a focused portfolio of deeply undervalued securities and actively engage with the companys management and board of directors to unlock shareholder value over the long-term.
About Oak Investment Partners
Oak Investment Partners was founded in 1978. Since that time, the firm has invested $9 billion in over 525 companies around the world, earning the trust of entrepreneurs with a senior team that delivers steady guidance, deep domain expertise and a consistent investment philosophy. We are involved in the formation of companies, fund spinouts of operating divisions and technology assets, and provide growth equity to mid- and late-stage private businesses and to public companies through PIPE investments. These companies are concentrated in the five major sectors that fuel the most disruptive growth in our world today: Information Technology, FinTech, Internet and Consumer, Healthcare Services, and Clean Energy.
About Generation Partners
Founded in 1995, Generation Partners provides equity capital to growth companies through buyout and growth equity investments.
About Spectrum Equity
Spectrum Equity is a leading growth equity firm providing capital and strategic support to innovative companies in the information economy. For over 25 years, the firm has partnered with proven entrepreneurs and management teams to build long-term value in market-leading internet, software and information services companies. Representative investments include Ancestry, Bats Global Markets, Definitive Healthcare, GoodRx, Grubhub, Lynda.com, Origami Risk, SurveyMonkey and Verafin. For more information, including a complete list of portfolio investments, visit www.spectrumequity.com.
Media Contacts
Sloane & Company
Dan Zacchei / Joe Germani
dzacchei@sloanepr.com / jgermani@sloanepr.com