DEFA14A: Dayforce Addresses Merger Litigation, Supplements Proxy

Dayforce, Inc. has filed supplemental disclosures to its definitive proxy statement to address stockholder litigation related to its pending merger with Dawn Bidco, LLC.

Summary

• Dayforce, Inc. entered into an Agreement and Plan of Merger with Dawn Bidco, LLC and Dawn Acquisition Merger Sub, Inc. on August 20, 2025, under which Dayforce will become a wholly owned subsidiary of Parent.
• A special meeting of stockholders is scheduled for November 12, 2025, to vote on matters necessary to adopt and complete the Merger.
• The Company has received several demand letters and three complaints (Stockholder Actions) alleging disclosure deficiencies and/or incomplete information in the definitive proxy statement regarding the Merger.
• Dayforce denies the allegations, believing them to be without merit and that no supplemental disclosures are legally required.
• However, to avoid delaying the Merger and minimize potential expenses, Dayforce is voluntarily making supplemental disclosures in this Current Report on Form 8-K.
• The supplemental disclosures amend sections of the definitive proxy statement related to confidentiality agreements (NDAs) with Thoma Bravo and Financial Sponsor A, and Evercore's financial analyses, including Discounted Cash Flow, Selected Public Company Trading, and Selected Transactions analyses.

Sentiment

Score: 4

Explanation: The filing addresses ongoing litigation related to a pending merger, which is a negative development. While the company is proactively mitigating risks by providing supplemental disclosures and denying the allegations, the existence of lawsuits introduces uncertainty and potential costs. The merger itself is a positive event, but this specific filing highlights challenges in its execution.

Positives

• Dayforce is proactively making voluntary supplemental disclosures to mitigate litigation risks and avoid potential delays to the Merger.
• Management explicitly states its belief that the allegations in the demand letters and stockholder actions are without merit and that no additional disclosures are legally required.

Negatives

• The Company is facing multiple demand letters and three lawsuits from purported stockholders alleging disclosure deficiencies in the definitive proxy statement related to the Merger.
• The litigation introduces uncertainty and potential legal expenses, even if the Company believes the claims are unfounded.
• There is a possibility that additional, similar demand letters or complaints may be received or filed, or that the existing Stockholder Actions may be amended.

Risks

• The timing, receipt, and terms and conditions of any required governmental and regulatory approvals of the proposed transaction could delay its consummation or cause the parties to abandon it.
• The occurrence of any event, change, or other circumstances could give rise to the termination of the Merger Agreement.
• Dayforce stockholders may not approve the proposed transaction.
• The parties to the Merger Agreement may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all.
• The proposed transaction could disrupt management time from ongoing business operations.
• Any announcements relating to the proposed transaction could have adverse effects on the market price of Dayforce's common stock.
• The proposed transaction may result in unexpected costs or expenses.
• There is a risk of litigation relating to the proposed transaction.
• The proposed transaction and its announcement could adversely affect Dayforce's ability to retain and hire key personnel and to maintain relationships with customers, vendors, partners, employees, stockholders, and other business relationships, and on its operating results and business generally.

Future Outlook

The filing's forward-looking statements primarily concern the benefits and timeline for closing the Merger, which remains subject to various assumptions, governmental and regulatory approvals, and other risks and uncertainties. No new financial guidance beyond the figures used in the financial advisor's analysis is provided.

Management Comments

• The Company believes that the allegations contained in the Demand Letters and the Stockholder Actions are without merit.
• The Company believes that no supplemental disclosures are required under applicable laws; however, in order to avoid the risk of the Demand Letters and the Stockholder Actions delaying the Merger and minimize the potential expense associated therewith, and without admitting any liability or wrongdoing, the Company is voluntarily making certain disclosures.
• The Company specifically denies all allegations in the Demand Letters and the Stockholder Actions, including that any additional disclosure was or is required.
• The Company does not intend to announce the receipt or filing of each additional, similar demand letter or complaint, or of any amended complaint.

Industry Context

This announcement reflects a common occurrence in M&A transactions where shareholder litigation arises, often challenging the adequacy of disclosures. The company's response, by providing supplemental information without admitting fault, is a standard strategy to mitigate legal risks and ensure the transaction proceeds. The financial analyses cited (DCF, public comps, precedent transactions) are widely accepted valuation methodologies in the financial advisory industry for assessing merger fairness.

Comparison to Industry Standards

• Evercore's Discounted Cash Flow analysis utilized perpetuity growth rates of 4% to 6% and discount rates ranging from 11.5% to 13.0%, based on an estimate of the Company's weighted average cost of capital.
• For the Selected Public Company Trading Analysis, Evercore applied an Enterprise Value/CY2026E Adjusted EBITDA multiple reference range of 12.4x to 16.5x to the Company's estimated Adjusted EBITDA of $757 million.
• In the same analysis, an Enterprise Value/CY2026E Revenue multiple reference range of 4.3x to 6.0x was applied to the Company's estimated Revenue of $2.184 billion.
• For the Selected Transactions Analysis, Evercore used a reference range of enterprise value to LTM Adjusted EBITDA multiples of 18.0x to 22.0x, applied to the Company's LTM Adjusted EBITDA of $559 million.
• Additionally, a reference range of enterprise value to LTM Revenue multiples of 6.0x to 7.0x was applied to the Company's LTM Revenue of $1.852 billion in the Selected Transactions Analysis.
• The implied equity values per share derived from these analyses ($46.01-$73.17 from DCF, $53.00-$75.00 from Public Comps, and $57.00-$74.00 from Selected Transactions) are compared against the merger consideration of $70.00 per share.

Legal Proceedings

• Several demand letters from purported stockholders alleging disclosure deficiencies and/or incomplete information regarding the Merger.
• Trent Carter v. Dayforce, Inc. et al., Index No. 659145/2025 (N.Y. Sup. Ct. filed Oct. 15, 2025).
• Blake Thompson v. Dayforce, Inc. et al., Index No. 659159/2025 (N.Y. Sup. Ct. filed Oct. 16, 2025).
• Robert Lacoff v. Brent Bickett et al., No. 74131/2025 (N.Y. Sup. Ct. filed Oct. 20, 2025).

Stakeholder Impact

• Shareholders: Are facing litigation regarding the merger, which requires supplemental disclosures. They will vote on the merger on November 12, 2025, with a proposed consideration of $70.00 per share.
• Management: May experience disruption to their time from ongoing business operations due to the proposed transaction and related litigation.
• Employees, Customers, Vendors, Partners: The proposed transaction and its announcement could have an adverse effect on the Company's ability to retain and hire key personnel and to maintain relationships with these stakeholders.

Next Steps

• A special meeting of stockholders is scheduled for November 12, 2025, to vote on the Merger.
• The Company may receive or file additional similar demand letters or complaints, or the existing Stockholder Actions may be amended.
• Dayforce assumes no obligation to update forward-looking statements, except as required by law.

Key Dates

Recommendation

The filing details ongoing litigation challenging the merger, which introduces uncertainty and potential delays. While management denies the allegations and is taking steps to mitigate risks, the situation warrants a 'hold' recommendation. The merger consideration of $70.00 per share is known, and the supplemental disclosures aim to ensure the merger proceeds. However, the legal challenges present a downside risk that needs to be monitored. Investors should hold their position pending the outcome of the stockholder vote and resolution of the litigation, as the merger's completion is still subject to conditions and potential disruptions.

Keywords

Dayforce, Merger, Acquisition, Proxy Statement, SEC Filing, Litigation, Stockholder Actions, Corporate Governance, Financial Analysis, Thoma Bravo, Dawn Bidco, M&A, Disclosure, Shareholder Vote