Starboard is a very successful activist investor and has extensive experience helping companies focus on operational efficiency and margin improvement.On May 26, Starboard and the company entered into an agreement pursuant to which four directors agreed to resign from the 10-person board and three new directors approved by the activist were added, effective at the 2020 annual meeting.
The company is a medical device company that specializes in peripheral intervention, cardiac intervention, breast cancer localization and endoscopy. Over the past several years, the company has put up high single digit to low double-digit organic growth by expanding its facilities, employees and strategic acquisitions. While its organic revenue growth has been on the higher end of its peers, this has not flowed through to profitability and the company's 14.
Fred Lampropoulos founded the company in 1987 and has been its chairman, CEO and president ever since. He has been focused on revenue growth and more recently on M&A and has done a great job in growing the company to where it is. However, he is still running the company more like an entrepreneur than a disciplined CEO and the company will benefit from a board and management team that is more focused on long-term profitability and margins.
There is a lot of room for improvement here and Starboard has tremendous experience in improving operations from a board level, particularly at founder-led companies. A parallel opportunity is that the company could get sold. There has been a lot of consolidation in the medtech space and Lampropoulos is at an age, 70, where he might start thinking about an exit.
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