Data protection company fends off a proxy contest by Starboard Value that could lead to shifts in leadership, direction
Commvault is fighting off proxy fight by an activist investor, activist investor Starboard Value, which has a history of changing company’s strategy and focus.
The Lowdown: Starboard Value nominated six candidates for the Commvault board in an effort for seats on the board of the New Jersey-based company.
The Details: Commvault has ammunition in the proxy fight. It’s adopted a limited poison pill strategy that’s giving investors options to declare the intent to buy discounted shares through April 2021. Commvault had implemented the policy to insulate it against the economic fallout of the COVID-19 pandemic. The option will make the shares less appealing to an unwelcome suitor such as Starboard.
The Impact: Commvault adopted the discounted stock option strategy as a means to preserve cash, which it’s using to maintain operations and staff positions rather than executing layoffs during the economic downturn. (See Commvault’s statement below.)
Background: Commvault is in the middle of a resurgence. Following the last proxy fight attempt, CEO Sanjay Mirchandani has reinvigorated the company with new leadership and products — particularly those impacting the channel.
In November, Commvault launched Metallic, a cloud-based service offering of its data protection technology to enable its partners to generate recurring revenue. It also updated and expanded many of its core data protection and backup products.
Also in November, Commvault appointed VMware veteran Mercer Rowe to lead global channels. Channel veteran Carmen Sorice is now leading the North America channel, and Cisco channel icon Edison Peres is advising the firm’s strategy.
The Buzz: In a statement, Commvault said of the Starboard directors nomination bid:
“Commvault’s top priorities, at this time, are the health and safety of our employees, taking care of customers, and operating our business. Commvault’s board and management team are focused on helping Commvault successfully navigate through the current environment, and we believe that this is where our attention should be directed. Notwithstanding these important priorities, Starboard has submitted director nominations, and the Commvault board will, consistent with its fiduciary duties, consider them.
“As always, the Commvault board and management team are committed to acting in the best interest of our shareholders. Commvault is in a dynamic industry, and we have made measurable progress in our turnaround efforts over the past year. We remain confident that we are well-positioned for the future.”