Activist investor Starboard Value has named six proxy directors it wants elected to Commvault’s board and is talking to Commvault’s CEO and CFO.
Starboard announced last week it had bought 9.3 per cent of Commvault’s shares at the end of March.
As we noted then, Commvault is 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.
Starboard looks for “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.”
In a 13D SEC filing on April 9 Starboard revealed it now owned 9.9 per cent of Commvault’s shares, just under the 10 per cent holding trigger that would set into operation Commvault’s poison pill rights plan. Commvault’s board voted in the plan on April 3, shortly after Starboard’s stake building was revealed.
In the filing, Starboard named six directors for whom it would seek proxy votes from shareholders to elect them to the board at Commvault’s 2020 AGM. The date of the AGM has not yet been announced.
A Commvault statement confirmed: “Starboard has submitted director nominations, and the Commvault Board will, consistent with its fiduciary duties, consider them.”
The statement revealed Commvault’s CEO and CFO had “spoken with Starboard representatives several times to understand their views and perspectives,” after learning of Starboard’s 9.3 per cent holding.
The six Starboard nominees are;
- Philip Black – former CEO of Nexsan Technologies,
- R. Todd Bradley – CEO of Mozido, a provider of digital commerce and payment solutions
- Gavin T. Molinelli – Starboard partner
- Jeffrey Smith – Starboard CEO and CIO
- Robert Soderbery – president of UpLift and former Cisco Enterprise SVP)
- Katherine Wagner – Yale University professor – Department of Economics
Black has previous with Starboard. He was nominated by Starboard for Quantum’s board when Starboard attacked that under-performing company in May 2013. The initial result of Starboard’s engagement with Quantum was thre of its directors joined Quantum’s board and that was followed by changed product strategies and a new CEO. The changed strategies included a focus on optimising tape revenues and building out its scale-out storage portfolio.
Wells Fargo analyst Aaron Rakers told subscribers this week: “We’d highlight that out of the 23 [Starboard] campaigns analyzed, 15 (65 per cent) resulted in major cost realignments, spinoffs, or eventual sales of the company.”
Also: “Starboard’s tech campaigns have been highly beneficial to investors with an average 2-yr. peak return of 48 per cent and an average return of 19 per cent from start to end of campaign vs. the S&P500 +7 per cent over the same time period. We would note that the average activist campaign from Starboard from initiation to final outcome is fairly quick; lasting an average of about 9 months.”
Blocks & Files expects some of Starboard’s nominees to be accepted by Commvault’s board.
