TNDM: ValueAct buys stake

ValueAct Capital bought a 6.2% stake in TNDM in late April, early May.

Here is some blurb about ValueAct from their website:

ValueAct Capital concentrates on acquiring significant ownership stakes in a limited number of companies that it believes are fundamentally undervalued. The investment team seeks to identify companies that are out of favor, or may be undergoing significant transition. Such companies may be temporarily mispriced for a variety of reasons, including perceived unfavorable industry conditions, poor business performance, changes in management or ownership, reorganizations, or other external factors. These conditions can often result in fundamentally “good” businesses that are available at depressed valuations. The goal in each investment is to work productively with management and/or the company’s board to implement a strategy or strategies that maximize returns for all shareholders.

ValueAct Capital is typically one of the largest independent shareholders at each of its core company investments and works in a constructive manner with management and/or the company’s board to successfully implement strategies that generate superior returns on invested capital. The six investment partners have extensive experience working effectively with portfolio companies as long-term large shareholders, and oftentimes as members of the companies’ boards. At any given time, the portfolio consists of ten to eighteen core company investments, as well as a small “farm team” of additional investments in development.

It is still too early to know what ValueAct has in mind. Although my guess is that TNDM’s huge cash balance, strong cash flow, and potential game changer with the ethernet exchange business could be a big draw. Management has said they wouldn’t shy away from making an acquisition or putting the cash to work. It will be interesting to see what ValueAct has in mind for the company.

Leave a Reply

%d bloggers like this: