Violin Memory fiddles with board, adds new director – music to Clinton Group's ears?
Bolshy investor appears pleased to see ex-NetApp bod
Violin Memory has announced a new board director and expanded the board from seven to eight seats to do so.
The Clinton Group, the activist investor that's been yelling at Violin to sell itself, is now on-board and on-message.
The new director is Vic Mahadevan, the ex-NetApp chief strategy officer. The canned quotes are full of the usual guff but between the lines they get interesting.
“Violin is a great company with unmatched enterprise and cloud storage solutions,” said Mahadevan, “a rapidly expanding customer base, and significant growth opportunities in the evolving market for enterprise flash solutions. I look forward to working with the board as Violin embarks on its next phase of growth and works to generate value for all Violin Memory stockholders.”
"All Violin Memory stockholders", take note.
Here's CEO and president Kevin DeNuccio: "[Mahadevan's] significant senior management experience in the industry, specifically in the enterprise storage space as Chief Strategy Officer for NetApp, will be invaluable as we continue to push forward with our strategic initiatives to improve execution, continue to lead the storage market with our technology, and drive sustainable long-term growth.”
That's "sustainable long-term growth" as in, we're not going to sell the company.
Here's the Clinton Group viewpoint, expressed by Joseph A. De Perio, its senior portfolio manager: "We are supportive of the steps the Board of Directors and management have taken to reorient the Company to an improved strategy for achieving growth and profitability. We appreciate Violin Memory’s willingness to engage constructively with stockholders [meaning us], and we believe Vic Mahadevan’s significant domain expertise and experience will benefit all of Violin Memory’s stockholders [including us with our holding from which we intend to profit].”
Violin Memory has entered into an agreement with Clinton Group, under which the Group will, among other things, vote its shares in favour of the election of Violin's slate of directors at its 2014 annual meeting of stockholders. The provisional May 23 date for that meeting has been pushed back to a date to be determined by the board; no rush, then.
Our reading between the lines is that the Clinton Group supports DeNuccio's turnaround strategy and progress so far, and it reckons Mahadevan is supportive of its desire to increase the stock price. Further, it believes that, for now, the turnaround plan is a better option than selling Violin.
Let's add a little interesting pair of tit-bits to this tasty dish: Joe De Perio joined the board of troubled Overland Storage when the Clinton Group led a share placement by Overland in March 2011. Mahadevan has been on Overland Storage's board since November 2012. It could be that Mahadevan is the Clinton Group's pick for Violin's expanded board. ®