Starboard Value has built a sizable position in Vertiv Holdings Co., as another company that went public via a blank-check deal becomes a target for activism.
(Bloomberg) — Starboard Value has built a sizable position in Vertiv Holdings Co., as another company that went public via a blank-check deal becomes a target for activism.
Starboard disclosed a 7.4% stake in the supplier of equipment and services for data centers in a regulatory filing Thursday, confirming an earlier report by Bloomberg News. The firm said in the filing that it believed the company was undervalued.
Starboard is believed to be seeking operational improvements at Vertiv, according to people familiar with the matter, who asked not to be identified because the matter is private.
The New York-based hedge fund has held discussions with Vertiv’s leadership and appears to support its focus on improving profitability under Chairman David Cote and Giordano Albertazzi, who will take over as chief executive officer next year, the people said.
Starboard Chief Executive Officer Jeff Smith is expected to discuss the new investment at the Capitalize for Kids Investor Conference in Toronto on Thursday, the people said.
Shares in Vertiv rose as much as 12% in early trading on Thursday. The stock was up 9.2% at 9:46 a.m. in New York, giving the Columbus, Ohio-based company a market value of about $4.7 billion.
Representatives for Starboard and Vertiv weren’t immediately available for comment.
Activist Targets
Industry watchers have speculated that companies that have gone public through special purpose acquisition companies will increasingly be targeted by activists because they have problems that might have deterred traditional initial public offering investors, such as governance issues or regulatory risks.
This will be at least the second time that a high-profile activist investor has targeted the successor of a SPAC. Earlier this year, Dan Loeb’s Third Point began pushing Cano Health Inc. to explore a sale.
Vertiv, previously a division of Emerson Electric Co., went public in 2020 via a merger with a SPAC backed by Goldman Sachs Group Inc. and led by Cote, who was previously CEO of Honeywell International Inc. and TRW Inc.
The company’s shares had fallen 54% this year through Wednesday amid a pullback in spending for data centers, higher costs and lingering supply chain issues. This month, Vertiv cut its profit forecast for the fourth quarter, primarily due to foreign exchange headwinds.
Salesforce, Splunk
Vertiv provides critical infrastructure for data centers in 130 countries around the world, including equipment, software, analytics and other services.
Starboard has pushed for changes at several high-profile companies in recent years. This week, the firm disclosed new positions in Salesforce Inc. and Splunk Inc., both of which it said it believes can make operational improvements. Smith said at a conference in New York Tuesday he also believed Splunk Inc. may be an attractive takeover target for strategic and financial buyers.
(Updates shares in sixth paragraph.)
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