Latest news with #Irenic
Business Mayor
17-05-2025
- Business
- Business Mayor
Irenic snaps up a stake in Couchbase. Here are two tracks the firm can take to create value
Business: Couchbase provides a cloud database platform for modern applications. Its database is engineered for high performance at scale to serve the needs of mission-critical applications that enterprises run their businesses on. Its products include Couchbase Capella, Couchbase Server and Couchbase Mobile. Its Couchbase Capella is a fully managed, automated and secure database-as-a-service that simplifies database management by deploying, managing and operating Couchbase Server across cloud environments. Its Couchbase Server is a full-featured, multi-service NoSQL database. It provides a comprehensive SQL-compatible query language, SQL++, that allows for a range of data manipulation functions. Its Couchbase Server can be deployed on premises or on any cloud. Its Couchbase Mobile is a full-featured embedded NoSQL database for mobile and edge devices that enables an always-on experience with high data availability. Activist: Irenic Capital Management Ownership: n/a Average Cost: n/a Activist Commentary: Irenic Capital was founded in October 2021 by Adam Katz, a former portfolio manager at Elliott Investment Management, and Andy Dodge, a former investment partner at Indaba Capital Management. Irenic invests in public companies and works collaboratively with firm leadership. Their activism has thus far focused on strategic activism, recommending spinoffs and sales of businesses. What's happening Irenic has taken a position in Couchbase (BASE). Behind the scenes Couchbase (BASE) provides a cloud database platform for modern applications. There are two types of databases: relational, such as Amazon, Oracle and Sybase; and document, intended for agile and mobile-centric applications. There are only two public companies operating in the documents database space: MongoDB and Couchbase. With few direct peers, the company has built a rock-solid business with enterprise-grade platforms used in applications from mobile apps to airline systems. The company originally went public on Feb. 22, 2021, but has since failed to impress in the public markets, with shares down over 20% since its initial public offering. The primary problem facing Couchbase is one common to young tech companies – the pressure to deliver high growth to meet the demands of its investor base. The company has done just that as revenue has increased every year since its IPO at 19.39% on average and gross margins have been incredibly high and consistent between 87% and 89% each year. However, reaching these revenue goals has come at the detriment of the company's margins and profitability. In 2024, selling, general and administrative expenses was 91.94% of revenue, staggeringly high for almost any other company, but just slightly high for Couchbase, which has averaged 91.25% since its IPO. For context, MongoDB's SG&A expense was 54.34% of revenue in 2024. Among other things, Couchbase has vastly overhired sales reps and managers to meet their growth targets. As a result, there isn't enough business to go around: While peers' reps hit their attainment goals at a 70% to 80% average, Couchbase's reps only hit them at 40% to 50%. In sum, Couchbase is a good company with a great product that is organically growing by mid double digits, but it is so focused on growth at all costs, that it is decimating its operating margins by investing millions of dollars to squeeze out a few additional percentage points of growth. But this is not completely management's fault. We have been experiencing a market where growth is king and any erosion in growth rates could start a company's stock on a downward trajectory. Enter Irenic Capital, which has taken a significant stake in Couchbase and made the company one of its five largest positions. There are two paths for an activist to potentially create value from this point. The first is through an operational restructuring: right-sizing management and the salesforce, optimizing capital allocation and improving operating margins while continuing to organically grow. This path would require a lot of time, money and heavy lifting from both Couchbase and the activist, likely involving Irenic securing board representation followed by years of collaboration and restructuring. Doing this could get the company at or over the Rule of 40 with lower growth rates but much higher operating margins, but it may not be pretty along the way. The stock would be likely to decline in the short term as growth declines as operating margins rise. This brings us to the second option, which is to explore a sale of the company. While we are not generally fans of 'sell-the-company' activism as it is often short-term minded in nature, there is a rationale for it here as the best way to maximize shareholder value on a risk-adjusted basis. The steps outlined above required to maximize the value of this business would best be done in private where there is no stock price fluctuation based on quarterly guidance and growth rates. A sale to either a larger strategic or financial acquirer would allow Couchbase to right-size its costs and pursue more organic, margin-friendly growth away from the pressures of the public market. Given both the viability of the options at hand and Irenic's track record of calling for and successfully assisting companies in take-private transactions, we expect that the firm's plan will follow the latter. As a growing company with a unique and stable business model, there would be no shortage of potential acquirers for Couchbase. There have been many strategic takeouts in the data/tech space including IBM's announcement that it would acquire DataStax and Progress Software's acquisition of MarkLogic. Moreover, with the recent push for consolidation in the space, Couchbase would also be a viable strategic asset for larger players like Amazon, Microsoft's Azure, Alphabet's Google or other industry leaders looking to bolster their data offerings. However, it seems like the more likely outcome is a take-private transaction via private equity, and one private equity investor could be a good contender. Haveli Investments, a PE firm founded by former Vista Equity Partners president Brian Sheth, is the largest shareholder in Couchbase with an approximately 9.8% ownership based on its latest 13D filling. Haveli is not a frequent 13D filer, nor is it the firm's strategy to take minority stakes in public companies. This appears to be more of a toehold for Haveli in a company it thinks is undervalued and might want to own. Haveli has only filed one other 13D in its history, on Blend Labs, which led to a strategic partnership shortly thereafter. While there aren't many public takeout comps to Couchbase, the closest would be Clayton, Dubilier & Rice and KKR's purchase of Cloudera in 2021 for $5.3 billion, or around 5.2-times revenue. While 5.2-times would imply only a 20% premium for shareholders, that might be acceptable to Irenic as Couchbase has closed as low as $13.44 per share over the past month and Irenic likely has a lower average cost than the $17.64 level where it ended April 30, the day news of the firm's position came out. Additionally, it is possible that Couchbase could get an offer closer to the 6-times revenue figure where some of its peers trade. Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.
CNBC
17-05-2025
- Business
- CNBC
Irenic snaps up a stake in Couchbase. Here are two tracks the firm can take to create value
Business: Couchbase provides a cloud database platform for modern applications. Its database is engineered for high performance at scale to serve the needs of mission-critical applications that enterprises run their businesses on. Its products include Couchbase Capella, Couchbase Server and Couchbase Mobile. Its Couchbase Capella is a fully managed, automated and secure database-as-a-service that simplifies database management by deploying, managing and operating Couchbase Server across cloud environments. Its Couchbase Server is a full-featured, multi-service NoSQL database. It provides a comprehensive SQL-compatible query language, SQL++, that allows for a range of data manipulation functions. Its Couchbase Server can be deployed on premises or on any cloud. Its Couchbase Mobile is a full-featured embedded NoSQL database for mobile and edge devices that enables an always-on experience with high data availability. Stock Market Value: $1.01B ($18.77 per share) Ownership: n/a Average Cost: n/a Activist Commentary: Irenic Capital was founded in October 2021 by Adam Katz, a former portfolio manager at Elliott Investment Management, and Andy Dodge, a former investment partner at Indaba Capital Management. Irenic invests in public companies and works collaboratively with firm leadership. Their activism has thus far focused on strategic activism, recommending spinoffs and sales of businesses. Irenic has taken a position in Couchbase (BASE). Couchbase (BASE) provides a cloud database platform for modern applications. There are two types of databases: relational, such as Amazon, Oracle and Sybase; and document, intended for agile and mobile-centric applications. There are only two public companies operating in the documents database space: MongoDB and Couchbase. With few direct peers, the company has built a rock-solid business with enterprise-grade platforms used in applications from mobile apps to airline systems. The company originally went public on Feb. 22, 2021, but has since failed to impress in the public markets, with shares down over 20% since its initial public offering. The primary problem facing Couchbase is one common to young tech companies – the pressure to deliver high growth to meet the demands of its investor base. The company has done just that as revenue has increased every year since its IPO at 19.39% on average and gross margins have been incredibly high and consistent between 87% and 89% each year. However, reaching these revenue goals has come at the detriment of the company's margins and profitability. In 2024, selling, general and administrative expenses was 91.94% of revenue, staggeringly high for almost any other company, but just slightly high for Couchbase, which has averaged 91.25% since its IPO. For context, MongoDB's SG&A expense was 54.34% of revenue in 2024. Among other things, Couchbase has vastly overhired sales reps and managers to meet their growth targets. As a result, there isn't enough business to go around: While peers' reps hit their attainment goals at a 70% to 80% average, Couchbase's reps only hit them at 40% to 50%. In sum, Couchbase is a good company with a great product that is organically growing by mid double digits, but it is so focused on growth at all costs, that it is decimating its operating margins by investing millions of dollars to squeeze out a few additional percentage points of growth. But this is not completely management's fault. We have been experiencing a market where growth is king and any erosion in growth rates could start a company's stock on a downward trajectory. Enter Irenic Capital, which has taken a significant stake in Couchbase and made the company one of its five largest positions. There are two paths for an activist to potentially create value from this point. The first is through an operational restructuring: right-sizing management and the salesforce, optimizing capital allocation and improving operating margins while continuing to organically grow. This path would require a lot of time, money and heavy lifting from both Couchbase and the activist, likely involving Irenic securing board representation followed by years of collaboration and restructuring. Doing this could get the company at or over the Rule of 40 with lower growth rates but much higher operating margins, but it may not be pretty along the way. The stock would be likely to decline in the short term as growth declines as operating margins rise. This brings us to the second option, which is to explore a sale of the company. While we are not generally fans of "sell-the-company" activism as it is often short-term minded in nature, there is a rationale for it here as the best way to maximize shareholder value on a risk-adjusted basis. The steps outlined above required to maximize the value of this business would best be done in private where there is no stock price fluctuation based on quarterly guidance and growth rates. A sale to either a larger strategic or financial acquirer would allow Couchbase to right-size its costs and pursue more organic, margin-friendly growth away from the pressures of the public market. Given both the viability of the options at hand and Irenic's track record of calling for and successfully assisting companies in take-private transactions, we expect that the firm's plan will follow the latter. As a growing company with a unique and stable business model, there would be no shortage of potential acquirers for Couchbase. There have been many strategic takeouts in the data/tech space including IBM's announcement that it would acquire DataStax and Progress Software's acquisition of MarkLogic. Moreover, with the recent push for consolidation in the space, Couchbase would also be a viable strategic asset for larger players like Amazon, Microsoft's Azure, Alphabet's Google or other industry leaders looking to bolster their data offerings. However, it seems like the more likely outcome is a take-private transaction via private equity, and one private equity investor could be a good contender. Haveli Investments, a PE firm founded by former Vista Equity Partners president Brian Sheth, is the largest shareholder in Couchbase with an approximately 9.8% ownership based on its latest 13D filling. Haveli is not a frequent 13D filer, nor is it the firm's strategy to take minority stakes in public companies. This appears to be more of a toehold for Haveli in a company it thinks is undervalued and might want to own. Haveli has only filed one other 13D in its history, on Blend Labs, which led to a strategic partnership shortly thereafter. While there aren't many public takeout comps to Couchbase, the closest would be Clayton, Dubilier & Rice and KKR's purchase of Cloudera in 2021 for $5.3 billion, or around 5.2-times revenue. While 5.2-times would imply only a 20% premium for shareholders, that might be acceptable to Irenic as Couchbase has closed as low as $13.44 per share over the past month and Irenic likely has a lower average cost than the $17.64 level where it ended April 30, the day news of the firm's position came out. Additionally, it is possible that Couchbase could get an offer closer to the 6-times revenue figure where some of its peers trade.
Business Wire
14-05-2025
- Business
- Business Wire
Irenic Expresses Governance Concerns Pertaining to Forward Air Corporation
NEW YORK--(BUSINESS WIRE)--Irenic Capital Management, LP (collectively with its affiliates, 'Irenic' or 'we') today issued the below statement regarding Forward Air Corporation (NASDAQ: FWRD) ('Forward Air' or the 'Company'). Irenic intends to vote against certain legacy members of Forward Air's Board of Directors (the 'Board') at the 2025 Annual Meeting of Shareholders ('Annual Meeting'). "Based on Irenic's independent analysis, we agree with Ancora Holdings Group's decision to withhold support for certain legacy directors at Forward Air's Annual Meeting. Forward Air's legacy directors circumvented the requirement to give shareholders a vote on the acquisition of Omni Logistics LLC in 2023. The Legacy Forward Air Board's maneuvers undermined the shareholder franchise on which the legitimacy of Board-led governance rests. While we respect these three directors as individuals, Forward Air's legacy directors, who usurped authority that properly belongs to shareholders, should have no role in the Company's governance today." About Irenic Irenic Capital Management, LP is an investment management firm founded by Adam Katz and Andy Dodge. Based in New York City, Irenic works collaboratively with publicly traded companies to ensure operating activities, capital deployment and management incentives are all aligned to create value for the company and its owners. For more information about Irenic, please visit
Yahoo
14-05-2025
- Business
- Yahoo
Irenic Expresses Governance Concerns Pertaining to Forward Air Corporation
NEW YORK, May 14, 2025--(BUSINESS WIRE)--Irenic Capital Management, LP (collectively with its affiliates, "Irenic" or "we") today issued the below statement regarding Forward Air Corporation (NASDAQ: FWRD) ("Forward Air" or the "Company"). Irenic intends to vote against certain legacy members of Forward Air's Board of Directors (the "Board") at the 2025 Annual Meeting of Shareholders ("Annual Meeting"). "Based on Irenic's independent analysis, we agree with Ancora Holdings Group's decision to withhold support for certain legacy directors at Forward Air's Annual Meeting. Forward Air's legacy directors circumvented the requirement to give shareholders a vote on the acquisition of Omni Logistics LLC in 2023. The Legacy Forward Air Board's maneuvers undermined the shareholder franchise on which the legitimacy of Board-led governance rests. While we respect these three directors as individuals, Forward Air's legacy directors, who usurped authority that properly belongs to shareholders, should have no role in the Company's governance today." About Irenic Irenic Capital Management, LP is an investment management firm founded by Adam Katz and Andy Dodge. Based in New York City, Irenic works collaboratively with publicly traded companies to ensure operating activities, capital deployment and management incentives are all aligned to create value for the company and its owners. For more information about Irenic, please visit View source version on Contacts Irenic Capital Managementcontact@
Associated Press
29-01-2025
- Business
- Associated Press
ARNC Shareholder Alert: Wolf Popper LLP Files Securities Class Action Lawsuit Against Arconic Corporation
NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Prominent investor rights law firm Wolf Popper LLP announces that it has filed a securities class action lawsuit on behalf of sellers of Arconic Corporation (NYSE: ARNC) common stock between April 19, 2022 and May 3, 2023, inclusive (the 'Class Period'). Captioned Charter Township of Shelby Police & Fire Pension & Retirement System v. Arconic Corporation et al., No. 25-cv-00863 (S.D.N.Y.), the Arconic class action lawsuit charges Arconic and certain of its executive officers and directors with violations of the Securities Exchange Act of 1934. A copy of the complaint is available on Wolf Popper's website by clicking here. If you sold Arconic common stock during the Class Period and wish to serve as lead plaintiff of the Arconic class action lawsuit, or have any questions concerning the Arconic class action lawsuit, please contact attorney Adam Savett of Wolf Popper by calling (212) 451-9655, or via e-mail at [email protected]. Lead plaintiff motions for the Arconic class action lawsuit must be filed with the Court no later than March 31, 2025. CASE ALLEGATIONS: Arconic is a provider of aluminum sheets, plates, and extrusions, as well as architectural products to the ground transportation, aerospace, building and construction, industrial and packaging end markets The Arconic class action lawsuit alleges that Arconic and certain of its senior officers and directors failed to disclose offers to purchase all of the outstanding shares of Arconic common stock at a material premium far above the Company's then-current stock price, while at the same time repurchasing millions of shares of Arconic common stock through stock buyback programs at prices below the offer price. These failures to disclose material non-public information artificially deflated the price of Arconic common stock. Arconic had an obligation to either disclose that it had received a formal acquisition offer from Apollo Global Management, Inc. ('Apollo') or abstain from trading in its own securities. On April 19, 2022, Arconic received an unsolicited non-public offer from Apollo to purchase all of the outstanding shares of Arconic at a price between $34 and $36 per share. On April 29, 2022, Arconic rejected Apollo's offer. However, Apollo continued to demonstrate interest in an acquisition of Arconic. Apollo partnered with Irenic Capital Management LP ('Irenic') concerning the potential acquisition of Arconic starting in May 2022. From May 5, 2022 through June 23, 2022, Apollo, Irenic, and Arconic had discussions concerning a potential acquisition of Arconic. Apollo and Irenic informed Arconic of their interest in exploring a negotiated transaction for Arconic and intent to submit a revised offer to acquire Arconic. Between June 23, 2022 and November 28, 2022, Arconic, Apollo and Irenic kept in contact, but these contacts did not result in the submission of any new proposals for an acquisition of Arconic. During the period June 1, 2022 through August 31, 2022, Arconic repurchased 4,357,690 shares of its common stock on public markets for a total cost of $122,943,904 and at an average price of $28.21 per share, significantly below Apollo's offer of $34 to $36 per share. On November 28, 2022, Apollo informed Arconic that it was considering submitting a new proposal for an acquisition of Arconic at a meaningful premium to Arconic's stock price, which closed at $21.65 per share on November 28, 2022. On December 12, 2022, Apollo submitted a revised proposal for to acquire Arconic in an all-cash transaction at a price of $30.00 per share, a meaningful premium to the price of Arconic's common stock, which closed on December 12, 2022 at $22.57 per share. Arconic thereafter negotiated and engaged with Apollo. Arconic also reached out to three additional parties concerning their interest in a potential acquisition of Arconic. However, Arconic continued to engage in share repurchases at prices materially below Apollo's $30 per share offer. From November 2022 to January 2023, Arconic repurchased an additional 2,107,450 shares of Arconic common stock on the public markets for a total cost of $47,032,891, and at an average price of $22.32 per share. On February 28, 2023, at approximately 2:00 p.m. Eastern Time, The Wall Street Journal reported that Apollo had submitted a bid at an unspecific price to acquire Arconic and that Arconic's advisors had reached out to other potential acquirors. In response, the price of Arconic common stock increased $4.68 per share, or 21.5%, from its price immediately before the WSJ report of $21.76 per share to a closing price on February 28, 2023 of $26.44 per share. On May 4, 2023, during pre-market hours, Arconic announced that it had entered into an agreement to be acquired by Apollo in an all-cash transaction at $30.00 per share. In response, the price of Arconic common stock increased $6.38 per share, or 28.3 %, from a closing price on May 3, 2023 of $22.55 per share to a closing price on May 4, 2023 of $28.93 per share. The merger eventually closed on August 18, 2023, with Apollo acquiring Arconic for $30 per share. THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who sold Arconic common stock during the Class Period to seek appointment as lead plaintiff in the Arconic class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Arconic class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Arconic class action lawsuit. An investor's ability to share in any potential future recovery of the Arconic class action lawsuit is not dependent upon serving as lead plaintiff. ABOUT WOLF POPPER: Wolf Popper has successfully recovered billions of dollars for defrauded investors. Wolf Popper's reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. For more information about Wolf Popper, please visit the Firm's website at May be considered attorney advertising in certain jurisdictions. Prior Results Do Not Guarantee A Similar Outcome. Contact Wolf Popper LLP Adam T. Savett 845 Third Avenue New York, NY 10022 Tel.: (212) 451-9655 Tel.: (877) 370-7703
