Activist hedge fund Strategic Turnaround Equity Partners LP, which is managed by Galloway Capital Management LLC, is keeping quite busy lately. The New York-based hedge fund has several campaigns underway to press for changes at three public companies.
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Several affiliated investors along with Galloway Capital own over 5% of Comforce Corp., a Woodbury, N.Y.-based staffing, consulting and outsourcing company for high-tech and healthcare jobs. On Dec. 10, Galloway Capital sent a letter to Comforce’s chairman expressing frustration with the company’s board and management and urged its directors to explore “strategic alternatives” such as hiring an investment bank to explore various options to increase shareholder value. These alternatives include: selling the company, disposing of assets or setting up a stock buyback program, among many others.
As with past target companies, Galloway pointed out that it may take some other actions if no response is forthcoming — and so far Comforce hasn’t responded. Actions Galloway may consider, according to a Dec. 11 Securities and Exchange Commission filing, include “seeking board representation, making proposals … concerning changes to the capitalization, ownership structure or operations.”
Separately, Galloway Capital is also engaging United American Healthcare Corp., a Detroit-based provider of healthcare services in Western Tennessee. According to an Oct. 31 filing with the SEC, Galloway and several affiliated investors own over a 7.28% stake and may try to raise their position in UAHC and could consider some of the same measures that it outlined in the Comforce filing.
Several months ago Galloway filed a 13D in Fibernet Telecom Group Inc., a New York-based voice and data traffic company that the hedge fund believes needs to take steps to improve shareholder value. Since launching the effort in June, Fibernet secured a credit line and launched a stock buyback program.
Strategic Turnaround portfolio managers Bruce Galloway and Gary Herman said they believe the current market environment offers good opportunities to deploy capital in undervalued public companies with the potential to realize significant future gains. — Ron Orol
Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World.
