Activist investor Legion Partners Asset Management is again pushing for a sale of OneSpan Inc., two years after winning seats on the cybersecurity firm’s board.
(Bloomberg) — Activist investor Legion Partners Asset Management is again pushing for a sale of OneSpan Inc., two years after winning seats on the cybersecurity firm’s board.
Legion Partners also wants OneSpan to raise its forecasts for capital returns and cash flow margins, according to a letter to the company’s board Monday reviewed by Bloomberg News.
“We strongly believe there are numerous strategic and financial parties interested in acquiring OneSpan given its highly attractive and stable customer base,” Legion Partners Managing Directors Chris Kiper and Ted White said in the letter. “The commitment to a more profitable operating plan as we have outlined above will likely generate even more interest in OneSpan.”
OneSpan fell 0.1% to close at $10.74 in New York trading Friday, giving the company a market value of about $429 million. A representative for OneSpan didn’t respond to requests for comment.
Legion Partners, which has an 8.7% stake in OneSpan, takes issue with the company’s “pivot away” from a growth strategy toward focusing on cash-flow optimization and capital returns, according to the letter.
“We believe current plans, as articulated by management on the company’s quarterly conference call last week, lack the urgency and magnitude of change required to expeditiously achieve fair value in the public markets,” Kiper and White said.
To that end, they want OneSpan to commit to boosting by 30% its adjusted earnings before interest, taxes, depreciation and amortization margins in 2024. That would be up from a target of 20% to 23%.
Legion Partners also wants the company to increase returns to shareholders from up to $20 million to $50 million or more via dividends or share repurchases.
Legion Partners won two seats on OneSpan’s board in 2021 after pushing for the company to explore a full or partial sale.
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