Box announced this morning that private equity firm KKR is investing $500 million in the company, a move that could help the struggling cloud content management vendor get out from under pressure from activist investor Starboard Value.
The company plans to use the proceeds in what’s called a “dutch auction” style sale to buy back shares from certain investors for the price determined by the auction, an activity that should take place after the company announces its next earnings report in May. This would presumably involve buying out Starboard, which took a 7.5% stake in the company in 2019.
Last month Reuters reported that Starboard could be looking to take over a majority of the board seats when the company board meets in June. That could have set them up to take some action, most likely forcing a sale.
Box acquires e-signature startup SignRequest for new content workflows
While it’s not clear what will happen now, it seems likely that with this cash, they will be able to stave off action from Starboard, and with KKR in the picture be able to take a longer term view. Box CEO Aaron Levie sees the move as a vote of confidence from KKR in Box’s approach.
“KKR is one of the world’s leading technology investors with a deep understanding of our market and a proven track record of partnering successfully with companies to create value and drive growth. With their support, we will be even better positioned to build on Box’s leadership in cloud content management as we continue to deliver value for our customers around the world,” Levie said in a statement.
Under the terms of the deal, John Park, Head of Americas Technology Private Equity at KKR, will be joining the Box board of directors. The company also announced that independent board member Bethany Mayer will be appointed chairman of the board, effective on May 1st.
Earlier this year, the company bought e-signature startup SignRequest, which could help open up a new set of workflows for the company as it tries to expand its market. With KKR’s backing, it’s not unreasonable to expect that Box, which is cash flow positive, could be taking additional steps to expand the platform in the future.
Box stock was down over 8% premarket, a signal that perhaps Wall Street isn’t thrilled with the announcement, but the cash influx should give Box some breathing room to reset and push forward.
Entertainment/ 1 month ago
Nigerian Singer Iyanya spills on why he is still single
Nigerian singer, Onoyom Mbuk better known as Iyanya, has revealed why he is yet...
Love & Relationship/ 1 month ago
Some men prefer monkey that gives them peace of mind – Janemena
Nigerian dancer and social media influencer, Usiwo Orezinena Jane, aka Janemena, has warned women...
English Premier League/ 1 month ago
EPL: Michael Owen identifies area Man Utd must improve to challenge Arsenal, Man City
Former Manchester United striker, Michael Owen, has revealed that his former club needs to...