Activist investor Starboard Value LP has acquired a 9.3 percent stake in data protection, backup and disaster recovery (BDR) software provider Commvault, a March 30 SEC filing reveals. It's unclear if Starboard is planning additional moves related to the investment.
Starboard, run by Jeffrey Smith, often seeks operational changes at the companies it targets, Reuters notes. But the hedge fund firm hasn't provided any clues about the stock purchases -- other than saying the shares were "undervalued and represented an attractive investment opportunity," the SEC filing indicated.
Starboard has been active in the software market. The firm also owns a 7.5 percent stake in Box -- the file sync and sharing cloud giant. Based on that stake, Box agreed to put three independent directors on its board, Reuters and TechCrunch note. The hedge fund has also influenced boardroom changes at eBay, PYMNTS.com notes.
Commvault Data Protection Business Evolution
Commvault over the past two-plus years has been a backup and disaster recovery (BDR) business in transition -- pushing hard into cloud and recurring revenue subscription services.
- CEO Sanjay Mirchandani arrived in February 2019, and disclosed a three-step business transformation plan in April 2019.
- Mirchandani explained key areas of progress and areas of challenge by July 2019.
- And more recently, Commvault unveiled a Customer Care Program to help customers and partners navigate the COVID-19 pandemic. New products and services have also arrived.
The business transformation remains a work in progress. Commvault revenue was $176.4 million for the third quarter of fiscal 2020, down 4 percent year-over-year, the company disclosed in January 2020. Net income was a $650,000 loss, competed to a $13.4 million profit in the corresponding quarter one year earlier.
During the quarter, Commvault launched a new SaaS offering (called Metallic) and integrated the Hedvig software-defined storage acquisition into its business, Mirchandani noted at the time. Also, subscription-type services surged during the quarter.
Commvault Rivals and Alternatives
Still, the company has been playing catch-up in the cloud-first data protection era. Commvault faces a lengthy list of emerging and established rivals -- particularly Cohesity, Datto, Druva, Rubrik and Veeam, among many others. Also, OpenText has moved into the market, by acquiring Carbonite and Webroot.
