SEC Form DEFA14A filed by HireRight Holdings Corporation

SUPPLEMENT TO THE PROXY STATEMENT FOR

THE SPECIAL MEETING OF STOCKHOLDERS OF HIRERIGHT HOLDINGS CORPORATION

TO BE HELD ON JUNE 21, 2024

Stockholder Litigation and Demand Letters Related to the Merger

On May 24, 2024, an action captioned Brian Levy v. Guy Abramo et al., Case No. 609034/2024 (the “Complaint”) was filed in the Supreme Court of the State of New York. The Complaint alleges, among other things, that the Definitive Proxy Statement misrepresents and/or omits certain purportedly material information in violation of the Tennessee Securities Act of 1980. The Complaint seeks various remedies, which include, among other things: (i) declaring that the defendants negligently misrepresented, concealed and omitted facts, and/or aided and abetted the same, in the Definitive Proxy Statement; (ii) declaring that the defendants were negligent and failed to exercise reasonable care or competence in communicating or failing to communicate truthfully in the Definitive Proxy Statement; (iii) requiring corrective and complete disclosures to be made to the Definitive Proxy Statement; (iv) enjoining and/or rescinding the closing of the stockholder vote on the Merger until trial or until certain corrective and complete disclosures are made; and (v) awarding the plaintiffs interest, attorneys’ fees, expert fees, and other expenses and costs. The defendants believe that the Complaint is without merit and specifically deny that any supplemental disclosure was or is required.

Additionally, attorneys representing several purported stockholders of the Company have sent demand letters to the Company alleging similar insufficiencies in the Preliminary Proxy Statement and the Definitive Proxy Statement (such letters, the “Demand Letters”, and together with the Complaint, the “Litigation Matters”). The Demand Letters generally demand access to certain books and records of the Company or demand that the Company disseminate certain corrective or supplemental disclosures in an amendment to the Preliminary Proxy Statement or Definitive Proxy Statement.

The Company and other named defendants in the Complaint deny that they have violated any laws or breached any duties to the Company’s stockholders, and the Company denies all allegations in the Litigation Matters. The Company believes that no supplemental disclosure to the Definitive Proxy Statement was or is required under any applicable law, rule or regulation. However, solely to eliminate the burden and expense of litigation, to moot plaintiffs’ disclosure claims, and to avoid potential delay or disruption to the Merger, the Company has determined to voluntarily supplement the Definitive Proxy Statement with the below disclosure. The Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with applicable law and nothing in the below supplemental disclosure or otherwise shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein.

These supplemental disclosures will not change the consideration to be paid to the Company’s stockholders in connection with the Merger or the timing of the Special Meeting. The board of directors of HireRight continues to recommend that you vote “FOR” the proposals to be voted on at the Special Meeting described in the Definitive Proxy Statement.

Supplemental Disclosures to the Definitive Proxy Statement

The following supplemental disclosures should be read in conjunction with the Definitive Proxy Statement, which should be read in its entirety. Defined terms used but not defined herein have the meanings set forth in the Definitive Proxy Statement. For clarity, new text within restated paragraphs from the Definitive Proxy Statement is indicated below by bold, underlined text and deleted text within restated paragraphs from the Definitive Proxy Statement is indicated below by strikethrough text.

 Litigation Relating to the Merger. As of the date of this proxy statement, there are no pending lawsuits challenging the Merger. However, potential plaintiffs may file lawsuits challenging the Merger and the outcome of any future litigation is uncertain. For a further description of litigation relating to the Merger, see “Special Factors—Litigation Relating to the Merger.”

On December 21, 2023, the Special Committee held a meeting at which representatives of each of Centerview and Davis Polk were present. At the request of the Special Committee, for the beginning of the meeting, Mr. Spaeth, HireRight’s CFO, was also present. At the outset of the meeting, Mr. Spaeth reviewed with the Special Committee and its advisors the Preliminary Projections, including the key assumptions underlying the Preliminary Projections and the risks and opportunities affecting HireRight’s business and the achievability of the Preliminary Projections. During this discussion, Mr. Spaeth characterized the Preliminary Projections and the assumptions underlying the Preliminary Projections as both reasonable and achievable. Following this discussion, the Special Committee and the members of HireRight’s management also discussed the current status of the Sponsor Stockholders’ due diligence regarding HireRight. After this discussion, Mr. Spaeth left the meeting. The Special Committee then discussed with its advisors their views with respect to the Preliminary Projections, including the key assumptions thereunder, including assumptions with respect to (i) revenue growth, (ii) margin expansion and (iii) cost reduction. The Special Committee and its advisors discussed the Special Committee’s views regarding the reasonableness and assessment of the achievability of those assumptions in light of the Company’s historical performance and challenges projecting its long-term financial performance on a multi-year basis and their remaining open questions about the Preliminary Projections. Following that discussion, the Special Committee determined it would reconvene later that week after the members of the Special Committee had an opportunity to consider what additional questions and/or document requests that it might want to solicit from the management team in respect of the Preliminary Projections.

On January 9, 2024, the Special Committee held a meeting at which representatives of each of Centerview and Davis Polk were present. At the request of the Special Committee, for the beginning of the meeting, Messrs. Abramo and Spaeth were also present. The Special Committee led a discussion with HireRight’s management regarding the Preliminary Projections and the Special Committee’s views with respect to certain key assumptions underlying such Preliminary Projections, including assumptions with respect to (i) revenue growth, (ii) margin expansion and (iii) cost reduction. During this discussion, HireRight’s management answered questions from the Special Committee and reviewed potential macro-economic conditions and other risks and opportunities affecting HireRight’s business that could impact the Preliminary Projections. The members of HireRight’s management stated that they continued to believe that the assumptions underlying the Preliminary Projections were reasonable, and that the results contemplated by the Preliminary Projections were achievable.

On February 13, 2024, the Special Committee held a meeting at which representatives of each of Centerview and Davis Polk attended. Representatives of Centerview reviewed with the Special Committee the discussion with the Sponsor Stockholders earlier that day, including their new proposal to acquire the shares of Company Common Stock not already owned by the Sponsor Stockholders for $14.25 per share in cash. At the meeting, representatives of Davis Polk reviewed with the Special Committee members certain provisions and key issues in the revised draft of the Merger Agreement, including (i) the termination fee payable by HireRight, (ii) the termination fee payable by the Sponsor Stockholders if they were not able to obtain the necessary debt financing, (iii) with respect to compensation and benefits protection for HireRight’s employees and the proposed treatment of the Company’s various forms of equity awards. Thereafter, members of the Special Committee and the representatives of Davis Polk discussed each of these the open issues and agreed upon appropriate responses.

Analyst Price Targets Analysis. Centerview reviewed price targets for the shares of Company Common Stock in publicly available Wall Street research analyst reports as of market close on November 17, 2023, noting that these price targets ranged from $10.00 per share to $15.00 per share and had a median value of $11.10 per share.