Acacia Research Streamlines Capital Structure, Strengthens Financial Base, Creating a Corporate Acquisition Platform Backed by Starboard Value LP

Acacia Research Corporation (Nasdaq: ACTG) (“Acacia” or the “Company”) and Starboard Value LP (“Starboard”), an investment adviser with a focused and fundamental approach to investing in publicly traded U.S. companies, today announced an agreement to streamline the Company’s capital structure, further strengthen its financial position, and position it as a unique Starboard-backed corporate acquisition platform. As a result of the agreement, which provides for Starboard converting its ownership interests to common shares, Acacia has enhanced its ability to be a strategic acquirer of operating companies and positioned all of the Company’s shareholders to be invested on the same terms as Starboard.

Acacia also announced that Chief Executive Officer Clifford Press will retire from his CEO and Board position, having overseen Acacia’s transformation, first as a board member, then as CEO, for the last four years. MJ McNulty has been appointed as interim-Chief Executive Officer. Mr. McNulty has served as Chief Operating Officer and Head of M&A at Acacia since March 2022. The Board will conduct a search for a permanent successor.

Transaction Highlights

Bolstering of Differentiated Corporate Acquisition Platform

• Provides additional capital and strengthens Starboard’s strategic relationship
• Gavin Molinelli, Partner and Portfolio Manager at Starboard, will join Acacia’s Board of Directors (the “Board”) as Chair

Streamlined Capital Structure

• Starboard will exercise its 5 million Series A Warrants at the $3.65 per share exercise price, which will result in an approximately 11.5% common equity ownership in Acacia and an approximately 27.5% voting interest, inclusive of existing Convertible Preferred.
• Acacia will commence a rights offering (the “Rights Offering”) in the first quarter of 2023, offering 0.25 new shares per fully diluted share outstanding, with a maximum of more than 38 million shares. The offering price will be $5.25 per share. Starboard has committed to purchase at least 15 million shares in the Rights Offering.
• Starboard has agreed to exercise its remaining approximately 31.5 million Series B Warrants at the $3.65 exercise price, subject to certain closing conditions, including regulatory approval.
• Starboard has agreed to convert its $35 million of Series A Preferred Stock into common stock at the conversion price of $3.65, subject to the approval of an amended certificate of designation at Acacia’s 2023 Annual Meeting.
• Following the consummation of the transactions, Acacia’s capital structure will consist entirely of common stock, eliminating $133.2 million of derivative liabilities¹ and $95 million of debt and preferred stock obligations. Starboard will receive $75 million in total foregone option value payments in exchange for the early exercise and early conversion of the derivatives.

Strengthened Capital Base