Select Page
Infoblox $BLOX Exploring Exit Under Pressure From Activist Starboard Value

Infoblox $BLOX Exploring Exit Under Pressure From Activist Starboard Value

Infoblox (NYSE: BLOX) reported its financial results for its fourth fiscal quarter and fiscal year ended July 31, 2016, as the company is said to be exploring a sale under pressure by activist investor Starboard Value LP, which recently disclosed a stake of about 7% in Infoblox. The company’s market capitalization climbed 6.55% today to $1.22 billion amid ongoing potential buyout rumors. Infoblox reportedly hired Morgan Stanley to help defend itself from Starboard’s CEO Jeff Smith, who is known as “the most feared man in corporate America” these days. Indeed the $4.83 billion sale of Yahoo’s (NASDAQ: YHOO) core business to Verizon (NYSE: VZ) is said ti have come to fruition largely as a result of unrelenting pressure exerted by Starboard. “We had a strong finish to fiscal 2016,” said Jesper Andersen, president and chief executive of infoblox. “Fourth quarter revenue grew 5% sequentially, and we achieved record fiscal 2016 revenue.” Total net revenue for the fourth quarter of fiscal 2016 was $86 million.. Total net revenue for fiscal 2016 was a record $358 million, an increase of 17% compared with the total net revenue of $306 million in fiscal 2015. On a GAAP basis, the company reported a net loss of $10 million, or $0.18 net loss per diluted share, for the fourth quarter of fiscal 2016, compared with a net loss of $5 million, or $0.08 net loss per diluted share, for the fourth quarter of fiscal 2015. For fiscal 2016, the company reported a GAAP basis net loss of $14 million, or $0.24 net loss per diluted share, compared with a net loss of $27 million, or $0.48 net loss per diluted share, in fiscal 2015. The company also announced results of the Infoblox Security Assessment Report for the second quarter of 2016, which found that 40 percent—nearly half—of files tested by Infoblox show evidence of DNS tunneling, a significant security threat that can indicate active malware or ongoing data exfiltration within an organization’s network. Infoblox was recognized as the market-share leader in enterprise-grade DDI in a recent report from IDC. Infoblox market share increased to 49.9 percent in 2015 from 46.7 percent in 2014. No other competitor had a market share greater than 15 percent. Infoblox delivers actionable network intelligence to enterprise, government, and service provider customers around the world. As the industry leader in DNS, DHCP, and IP address management, the category known as DDI, Infoblox provides control and security from the core—empowering thousands of organizations to increase efficiency and visibility, reduce risk, and improve customer experience. Starboard Value LP is a New York-based investment adviser and activist hedge fund with a focused and fundamental approach to investing in publicly traded U.S. companies. Starboard invests in what it refers to as “deeply undervalued companies and actively engages with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders.” As of March 31, 2016, Starboard Value held 22 institutional investment positions with a total market value of $2.58 billion, according to its SEC 13-F filings, the largest of which was its stake in Yahoo Inc., consisting of roughly 12.3 million YHOO shares valued at $484 million. According to FactSet, through March 31, 2016 Starboard has waged 46 campaigns and gained a total of 66 board seats since its inception in 2011. Jeffrey Smith is the co-founder, chief executive and chief investment officer of Starboard, which was spun off in 2011 from hedge fund Ramius LLC, a subsidiary of the Cowen Group Inc. (NASDAQ: COWN) — whose chairman Peter A. Cohen, was the former vice chairman of Republic New York Corp. and former chairman and CEO of Shearson Lehman Brothers. Smith previously served as vice president and board member of his father’s company, the Fresh Juice Company, until it was reportedly sold for $20 million in 1998. He began his career in the M&A department at Société Générale, after graduating from the Wharton School of Business with a BS in Economics. Smith currently serves on the board of Yahoo! Inc., and is the chairman of Advance Auto Parts Inc. He was formerly chairman of Darden Restaurants Inc. and Phoenix Technologies Ltd., and formerly served on the boards of Quantum Corp., Office Depot Inc., Regis Corp., Surmodics Inc., Zoran Corp., Actel Corp., Kensey Nash Corp., and S1 Corp. Photo: Jeffrey Smith, Co-Founder, CEO & CIO of Starboard Value LP.]]>