NEW YORK--(BUSINESS WIRE)--Sachem Head Capital Management LP, a beneficial owner of approximately 9% of the outstanding common stock of Eagle Materials Inc. (NYSE: EXP), today announced that it has nominated two highly qualified candidates – Wendy Lane and Scott Ferguson – for election to the Eagle Board of Directors at the Company’s 2019 Annual Meeting of Stockholders.

Sachem Head sent the following public letter to the Company’s shareholders in connection with its nominations:

Dear Fellow Eagle Shareholders:

Sachem Head has nominated two highly qualified directors – Wendy Lane and Scott Ferguson – for election to the Eagle Board of Directors (the “Board”). We have also given notice that we intend propose a non-binding resolution at the 2019 Annual Meeting of Stockholders (the “Annual Meeting”) to declassify the Company’s Board. Our proposals follow several weeks of engagement with the Eagle management team and its newly appointed Chairman, Mike Nicolais.

On April 4, 2019, following Sachem Head’s initial filing of a Schedule 13D on March 28, 2019, we presented Eagle’s management with a detailed analysis of potential opportunities available to the Company, which precipitated the Company’s April 18, 2019 announcement that it would conduct a strategic review.1 Since that announcement, Sachem Head has tried to work collaboratively with the Board to add relevant experience and shareholder alignment to assist in the review. Unfortunately, thus far the Company has rejected Sachem Head’s request to add even a single new director to its Board.

As we have discussed with the Company, we believe that Eagle’s core cement and wallboard businesses are well‐run, valuable assets that are well positioned within their respective industries. Eagle’s stock price, however, does not reflect the true value of these businesses. While both of these assets have industry‐leading margins and generate significant cash flow, the diversion of the Company’s resources and cash flow to fund Eagle’s expansion into Oil & Gas Proppants has resulted in substantial under performance in relation to peers. Given the lack of synergies among Eagle’s assets, we believe that the public markets have applied a discount to the Company’s trading price. In our view, this discount can be eliminated by separating these respective businesses into more focused entities. Given their unique competitive positions, we believe that both the cement and wallboard businesses may have a range of attractive strategic alternatives that could provide more value to shareholders than a simple separation of these assets.

While we are encouraged by the Company’s announcement of a strategic review, the fact remains that the Company, by its own admission, has undertaken similar reviews in the past and has never taken action to unlock value. Without changes in the Company’s boardroom, there can be no assurances that this time will be different. We particularly note that this review has apparently been initiated in reaction to shareholder pressure (our 13D filing and the subsequent overwhelming support from other shareholders) as opposed to stemming from an initiative of management and the Board to independently pursue these alternatives.

We have not proposed a simple sale of the Company (which is a possible outcome) but instead a full strategic review which will require the Board to assess complex multivariate alternatives, and understand the financial, legal, and value nuances of each outcome. We have done significant work on these topics, and our strong belief is that having a shareholder in the room with the analytical capacity and alignment to consider these alternatives would help ensure the optimal outcome. Furthermore, conflicts of interest between various constituents often exist in these situations. Shareholder representation can help mitigate these issues should they arise.

We believe the Company’s shareholders deserve new voices in the boardroom who are not burdened by yesterday’s decisions, and we are troubled by the Board’s reluctance to add even just one Sachem Head nominee to its ranks. Given that our last request for a single representative is roughly proportional to our ownership of Eagle, and that one director would not control any specific outcome, it is unclear what the Board fears.

We believe that our nominees will bring sorely needed skills, fresh thinking and strong shareholder alignment to the Company’s boardroom. We look forward to discussing our nominees and ideas further with our fellow shareholders soon.

Best regards,

Scott Ferguson

Sachem Head Capital Management LP

Biographies of Sachem Head Nominees:

Wendy E. Lane currently serves as a director of Willis Towers Watson Public Limited Company (where she serves on the Risk Committee and chairs the Compensation Committee) and as a director of Al Dabbagh Group, a private Saudi Arabian company (where she established and chairs the Audit and Risk Committee). From 2015 through 2019, Ms. Lane served as a director of MSCI, Inc. (NYSE: MSCI), where she served on the Compensation Committee, and has previously served on the boards of six other public companies, including Laboratory Corporation of America (NYSE: LH), where she served on the Nominating and Corporate Governance Committee and chaired the Audit and Compensation Committees, and UPM Kymmene Corporation (OTCMKTS: UPMKY), a Finnish public company, where she served on the Audit Committee. In addition to her public company and international board experience, Ms. Lane has served as Chairman of Lane Holdings, Inc., an investment firm, since 1992. Prior to forming Lane Holdings, Inc., Ms. Lane was a Principal and Managing Director of Donaldson, Lufkin and Jenrette Securities Corporation, an investment banking firm, serving in these and other positions from 1981 to 1992. Prior to that, Ms. Lane was an investment banker at Goldman, Sachs & Co. Ms. Lane holds a B.A. from Wellesley College in Mathematics and French and an M.B.A. from Harvard Business School.

Scott D. Ferguson is the managing partner and portfolio manager of Sachem Head Capital Management, a value-oriented investment management firm based in New York. Prior to founding Sachem Head, he spent nine years at Pershing Square Capital Management, which he joined pre-launch as the firm’s first investment professional. Prior to Pershing Square, Mr. Ferguson earned an M.B.A. from Harvard Business School in 2003 and was a vice president at American Industrial Partners, an operations focused private equity firm, from 1999 to 2001. Mr. Ferguson was also a business analyst at McKinsey & Company from 1996 to 1999. Mr. Ferguson graduated from Stanford University with an A.B. in Public Policy in 1996. He currently serves on the board of directors of the Henry Street Settlement and is also a member of the Robin Hood Leadership Council. He previously served on the board of directors of Episcopal Charities of the Diocese of New York and is a former director of Autodesk, a leading design & engineering software company.

About Sachem Head Capital Management

Sachem Head is an investment manager founded in 2013 by Scott D. Ferguson. The firm employs a concentrated, value-oriented investment strategy and is primarily focused on equity investments in North America and Europe.