Elliott Considers Buyout of Supply-Chain Software Firm E2open
Elliott Investment Management is considering making a proposal to take supply-chain software company E2open Parent Holdings Inc. private, according to people familiar with the matter. E2open provides a multi-enterprise cloud-based network, empowering customers to connect with all trading partners and logistics providers across all tiers and ecosystems.
Elliott reported a nearly 14% stake in E2open in a 13D filing Monday with the US Securities and Exchange Commission converting its position to active from passive. The firm said the stock is undervalued and it will seek to engage with the company’s board and management about strategic opportunities to maximize shareholder value, the filing showed, confirming a Bloomberg News report.
The activist hedge fund is evaluating its next steps, the people added, asking not to be identified because the matter is private.
E2open shares fell by a record 50% and touched an all-time low on Oct. 11 after the company cut its earnings forecast and ousted longtime chief executive officer Michael Farlekas. Board member Andrew Appel was named interim CEO. The stock rose 22% to $2.98 at 9:57 a.m. in New York trading Monday, giving E2open a market value of about $904 million.
Deliberations are at an early stage and Elliott could still decide against pursuing a buyout, the people said. A representative for E2open didn’t immediately respond to a request for comment.
Elliott participated in the original buyout of E2open in 2015 when Insight Venture Partners led a deal to buy it. Elliott is among its top 10 shareholders, according to data compiled by Bloomberg. Other major investors in the company include private equity firm Francisco Partners, Neuberger Berman, Temasek Holdings Pte and Insight.
The Austin, Texas-based company went public in 2021 through a merger with a blank-check company backed by Chinh Chu’s CC Capital and Neuberger Berman that valued it at more than $2.5 billion when it was announced.
Former targets of special purpose acquisition companies have started to draw takeover interest from private equity firms. Blackstone Inc. acquired events software platform Cvent earlier this year, while car insurance software provider CCC Intelligent Solutions Holdings Inc. has private equity buyers circling, Bloomberg News previously reported. Less healthy former de-SPACs are filing for bankruptcy or looking for a rescue.
E2open has grown through acquisitions over the past few years, including the takeover of software company Amber Road(who are a leading provider of on-demand Global Trade Management (GTM) solutions) in 2019 for $425 million and a buyout of Francisco-backed BlueJay(who are a transportation management and procurement software solution) for $1.7 billion, including debt, in 2021. One of its major customers is Dell Technologies Inc.
Elliott, while best known as an activist investor, has been involved in private equity deals for nearly a decade. It was part of a consortium that acquired Syneos Health Inc. earlier this year for about $4.4 billion. It’s also exploring a sale of Gigamon, a technology company it acquired in 2017, Bloomberg News previously reported.