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Proxy Battle Looms for Commvault

April 02, 2018

Elliott Management which manages funds that collectively own 10.3% of common stock and economic equivalents of Commvault Systems released a letter announcing its intention to nominate four highly qualified candidates to the Commvault Board.

In addition, the letter outlined a path forward for Commvault to create significant shareholder value through fundamental improvements in the Company’s execution, operations, capital allocation and governance. Elliott stated in the letter that it is looking forward to constructive engagement with the Company and optimistic about developing a mutually supported path forward.

 

Commvault released the following statement in response to the letter, "Commvault conducts open communications with its stockholders, and the Board of Directors and management team values their input. Commvault has had initial discussions with Elliott and we go into these discussions with an open mind, a goal of enhancing stockholder value, and optimistic for Commvault’s future."

Elliott’s nominees to the Board of Commvault include:

  • Martha Bejar: Martha is a three-time CEO and is currently the CEO of Unium and co-founder / CEO of Red Bison Advisory Group. Previously, Martha was the CEO of FlowMobile Wireless and Chair / CEO of Wipro Infocrossing Cloud Computing. Additionally, Martha serves on the Board of CenturyLink ($18B)1 and Mitel ($1B) and was previously on the Board of Polycom ($2B).
  • Wendy Lane: Wendy is a highly accomplished Board member with deep and varied experiences across many industries. Today, she serves on the Board of Willis Towers Watson ($20B), UPM-Kymmene ($20B) and MSCI ($13B) and was previously on the Board of Laboratory Corporation of America ($16B).
  • John McCormack: John is the former CEO of Websense, a Vista Equity take-private investment, which subsequently sold to Raytheon in a highly successful transaction. Today, John is the CEO of Fidelis Cybersecurity, Executive Chairman of AppRiver and a Director of Ping Identity.
  • Chuck Moran: Chuck is the founder and former CEO of Skillsoft, a leading provider of SaaS-based e-learning software, which was acquired by a private equity consortium. Chuck has deep technology experience in the software industry and has been involved in the Data Management industry for several decades. Additionally, Chuck recently joined the Board of Manhattan Associates ($3B).

The full text of the letter can be read below:

April 2, 2018

The Board of Directors
Commvault Systems, Inc.
1 Commvault Way
Tinton Falls, NJ 07724

Dear Members of the Board:

We are writing to you on behalf of Elliott Associates, L.P. and Elliott International, L.P. (collectively, “Elliott” or “we”), which collectively own 10.3% of common stock and economic equivalents of Commvault Systems, Inc. (the “Company” or “Commvault”), making us one of the largest shareholders of the Company.

We are writing to you today to share our thoughts regarding the need for fundamental change at Commvault. We believe Commvault’s current value does not reflect its leadership position in the Data Management software market and that there exists a distinct and significant value opportunity at the Company. We want to make clear that we have great respect for what Bob and Al have built over the last two decades. The value creation opportunity present at Commvault today would not be possible without their leadership.

Our letter today lays out the reasons for Commvault’s share-price underperformance, outlines our proposed path forward and introduces the four highly qualified candidates we are nominating to the Commvault Board. We are releasing this letter publicly to make our views clear in conjunction with submitting our nominees for consideration at the upcoming annual meeting. We have deep experience as software investors, and our track record in technology is one of partnering with management teams and boards to find mutually supported paths to value creation. We have spent significant time and resources evaluating Commvault over several years, and we hope you find our conclusions well considered.

The balance of our letter is organized as follows:

  • About Elliott Management
  • Commvault’s Growth to Today
  • Commvault as a Public Company
  • The Path Forward
  • Next Steps

We want to emphasize that we have done considerable work on Commvault and have great respect for what Bob and his team have built. Additionally, we have enormous appreciation for the hard-working and talented employees at Commvault who have helped build the Company into what it is today. We believe the actions proposed in this letter will result in greater innovation, enhanced go-to-market productivity, increased channel enablement and more satisfied customers. We are optimistic that we can work together with the Board to reach a collaborative agreement that will be in the best interests of the Company and its shareholders. Elliott has a great deal of experience working constructively with companies that have faced similar issues, and we look forward to commencing our work together to create long-term, sustainable value at Commvault. Thank you for your time and for considering our thoughts.

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