Starboard Value sinks claws into Commvault

Starboard Value, the prominent activist investor, has accumulated a 9.3 per cent stake in Commvault, the veteran data management vendor.

Starboard has not yet revealed what it wants Commvault to do but it will want Commvault to do something. On its website, the firm proclaims: “Starboard invests in deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.”

Commvault gave us a noncommittal response to Starboard’s stake building: “Commvault’s top priorities, at this time, are the health and safety of our employees, taking care of customers, and operating our business. As always, Commvault embraces open dialogue with our shareholder community and will continue to act in their best interest.”

However, it is unlikely to welcome the attention of Starboard, which is currently agitating for changes at eBay and Box Inc. The company is already reorganising sales, marketing and product strategies under the leadership of Sanjay Mirchandani. He was installed as CEO in February last year with the approval of Elliot Management, another activist investor, which ripped into Commvault in March 2018.

The outcomes of Elliot’s intervention included the CEO resigning, board-level changes, a 20-into-four product set simplification, and a stronger focus on partners and the public cloud.

Commvault progress

Under Mirchandani, Commvault has acquired the software-defined storage startup Hedvig and the Metallic SaaS backup company and changed its sales leadership.

But a revenue upturn has eluded the company so far, with the Q3 fy20 quarter ended December 31, 2019 representing the fourth successive quarter of revenue decline, compared with the previous year.

Discussing those earnings, Mirchandani said: “Our ability to achieve these results is a direct reflection of the progress we are making on the simplification, innovation and execution priorities we established at the start of the fiscal year. These priorities will be the foundation for our return to growth.”

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