Nierenberg Investment Management Co. is launching an activist campaign at
Brooks Automation Inc., a Chelmsford, Mass.-based manufacturer of production
tools for chipmakers.
According to a
Securities
and Exchange Commission filing on Wednesday, David Nierenberg and his
investment vehicle are pressing Brooks Automation, which has a stock market
capitalization of $987 million, into buying back 10 million shares over the
next year. Nierenberg Investment Management has a 7.2% stake in Brooks
Automation.
Continue reading below
“We believe that the combination of continued share gains, product cost
reduction and a strong commitment to a large, ongoing share repurchase program
together have the potential to quadruple Brooks' share price over the next
four years,” Nierenberg wrote in a letter to Brooks Automation CEO Robert
Lepofsky. “We realize that this is an aggressive objective, but it also is a
feasible objective: we are convinced that Brooks has the capabilities to make
this happen.”
Brooks Automation completed a $110 million share repurchase in July, but
Nierenberg points out that he expects the production tool maker to have
roughly $4 a share with zero debt by the end of the week, leaving sufficient
room on the balance sheet for the additional share buyback. “It is a rapidly
growing operating company which generates more cash than it needs,” Nierenberg
wrote. “We hope you make it a top priority.” —Ron Orol
See
SEC filing
See
December 2005 story about Nierenberg from TheDeal.com
See
related August 2007 story about new CEO from Tech Confidential
Ron Orol is a reporter for The Deal and author of
Extreme
Value Investing: How Activist Hedge Fund Managers Are Taking on the
World.
Tags:
deals,
m&a,
mergers,
hedge
funds
