Company: Catalent (CTLT)
Business: Catalent develops and manufactures solutions for drugs, protein-based biologics, cell and gene therapies, and consumer health products worldwide. The company operates through four segments: Softgel and Oral Technologies, Biologics, Oral and Specialty Delivery, and Clinical Supply Services.
Stock Market Value: $8.86B ($49.16 per share)
Activist: Elliott Investment Management
Percentage Ownership: n/a
Average Cost: n/a
Activist Commentary: Elliott is a successful activist investor known for its expertise in the technology sector. The firm has a team of analysts, engineers, and operating partners with extensive experience in the industry. They closely monitor companies before investing and have a pool of qualified board candidates. While Elliott has not disclosed its stake in Catalent, based on their history, it is estimated to be around $1 billion.
What’s happening?
On Aug. 29, Elliott and Catalent entered into a cooperation agreement. As part of the agreement, Catalent temporarily increased the size of its board and appointed four new directors, including Steven Barg from Elliott. Catalent also established a strategic and operational review committee to assess its business, strategy, and operations. John Greisch was appointed executive chair of the board and chair of the committee. Elliott agreed to certain voting and standstill provisions.
Behind the scenes
Catalent is a leading outsourced manufacturer in the pharmaceuticals industry. Despite facing challenges such as the impact of the Covid pandemic and self-inflicted issues, the long-term intrinsic value of the company remains intact. Elliott’s involvement as an activist investor presents an opportunity to enhance shareholder value. There is potential for strategic acquisitions or a sale of the company. Catalent’s recent appointment of a new CEO, Alessandro Maselli, may also influence the outcome of the review.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.
