Engaged Capital Sends Letter to the Board of Volcano Corporation
September 29 2014 - 8:30AM
Business Wire
- Calls on Board to immediately appoint
shareholder representatives, evaluate strategic alternatives and
begin CEO search
Engaged Capital, an investment firm specializing in small and
mid-cap North American equities and beneficial owner of
approximately 2,638,403 shares of the common stock of Volcano
Corporation (“VOLC” or the “Company”) (Nasdaq:VOLC), today sent an
open letter http://engagedcapital.com/press/VOLCBODLetter.pdf to
the Company’s Board of Directors (the “Board”), filed with the U.S.
Securities and Exchange Commission.
In its letter to the Board, Engaged Capital highlighted the
multi-year history of management’s flawed long-term plans and the
Board’s lackadaisical oversight. The Company’s excessive operating
expenses, misinformed and value destructive capital allocation, and
excessive executive compensation all stem from a profound failure
of leadership. As a result of these failures, VOLC shareholders
have suffered greatly.
Engaged Capital believes there is an opportunity to reverse
VOLC’s underperformance and unlock significant shareholder value if
the Board immediately sets a new course for the Company.
“Shareholders have suffered through a prolonged period of
material underperformance due to management’s overly optimistic
business plans and its inability to identify and react to changing
market conditions,” said Glenn W. Welling, Principal and Chief
Investment Officer of Engaged Capital. “It is time for new
leadership. We urge the Board to immediately commence a parallel
process to evaluate strategic alternatives and conduct a search for
CEO candidates with a history of driving profitability and
extracting value from medical device assets.”
“We have offered on three separate occasions, both orally and in
writing, highly-qualified candidates to serve as board members,
only to have these private entreaties summarily rejected. Instead
of seeking to work constructively with one of VOLC’s largest
shareholders, the Board has irrationally positioned the Company for
a costly and unnecessary proxy fight. If the Board fails to uphold
its fiduciary responsibilities, shareholders will have no choice
but to vote to replace Chairman Ron Matricaria, CEO Scott
Huennekens and Lesley Howe as directors of the Company at the 2015
annual meeting,” continued Mr. Welling.
About Engaged Capital:
Engaged Capital, LLC, (“Engaged Capital”) was established in
2012 by a group of professionals with significant experience in
activist investing in North America and was seeded by Grosvenor
Capital Management, L.P., one of the oldest and largest global
alternative investment managers. Engaged Capital is a limited
liability company owned by its principals and formed to create
long-term shareholder value by bringing an owner’s perspective to
the managements and boards of undervalued public companies. Engaged
Capital manages both a long-only and long/short North American
equity fund. Engaged Capital’s efforts and resources are dedicated
to a single investment style, “Constructive Activism” with a focus
on delivering superior, long-term, risk-adjusted returns for
investors. Engaged Capital is based in Newport Beach,
California.
For Engaged Capital, LLCBayfield Strategy, Inc.Riyaz Lalani,
416-907-9365rlalani@bayfieldstrategy.com
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