For 17 years Jeffrey Smith, the co-founder of activist investment firm Starboard Value LP, has been telling public companies he and his team can help improve their operations. Now he is saying the same thing to private companies.
Starboard this week said it had raised US$360 million through a blank-check acquisition vehicle called SVAC and plans to buy a solid but underperforming private business in the technology, healthcare, consumer, industrials, hospitality or entertainment sector to then merge it into a publicly traded company.
"If a family places their company, their baby essentially, with us, we will take their business to a better place," he said, adding that he and the advisers and directors he recruited to SVAC can identify and repair weaknesses and be a bridge to the public markets that would not have existed before. After the initial approach, Smith says the work that needs doing at a private or public company is often similar and that Starboard's approach would be the same; following a time-tested playbook that lifted returns at Darden Restaurants and Papa John's Pizza .
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