Starboard chief Jeffrey Smith called the ACI Worldwide takeover an “attractive” target after it acquired 9% of the payment systems company, at a conference on Thursday. He further said that ACI is equally attractive when its current revenue multiplies compared to recent transaction comps.
An attractive takeover target, ACI Worldwide has underperformed peers, says Smith
Jeffrey Smith is Starboard Value’s chief executive officer and chief investment officer. At a Capitalize for Kids Virtual Investors Conference, he said that ACI has underperformed peers that include Commvault Systems, Blackbaud, and FireEye despite having a unique collection of assets and suitable business characteristics. In the last five years, ACI has returned around 37% which, is much lower than the 151% gain of its peers.
Starboard announces stake in ACI Worldwide with 10.5 million shares
He said that in recent years, both the strategic and private equity buyers have been active with an unusual amount of M&A activity in the payments sector. ACI’s stock price closed at $31.55 on Thursday, which is approximately the same price that it closed at on Monday. It was before Starboard announced its stake in ACI with an ownership of 10.5 million shares. The Naples, Florida headquartered firm did not comment on Smith’s presentation.
Starboard is known for its operational know-how and refining public companies. Darden Restaurants is one such example. Starboard has already secured 22 board seats in 2020. These seats include three at data management software maker Commault Systems. It is a peer of ACI Worldwide.
ACI has room for organic growth, new management to take necessary steps
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Starboard stated that ACI has room to increase its organic growth with its expanding operating margins. It is currently valued at $3.7 billion. Also, the new management will take the necessary steps. Smith and the team are looking forward to understanding the details and confirm if all units are core to the company.