RDG Capital Cites Significant Shareholder Support For A Sale Of Internap Amidst Rising Data Center M&A Activity
Acknowledges Internap To Review Board Composition And Potential Candidacy Of Russell Glass
NEW YORK, Aug. 26, 2015 /PRNewswire/ -- RDG Capital Fund Management ("RDG"), a significant shareholder of Internap Corporation ("Internap" or the "Company") (Nasdaq: INAP), announced today it has delivered a letter to the Company's Board of Directors (the "Board") indicating that RDG is now convinced that the majority of Internap shareholders would like the Board to explore a sale of the Company in order to take advantage of the robust data center M&A market citing:
- data center M&A activity has reached a record level with transactions totaling more than $6 billion announced in just the past few months alone
- data center companies comparable in size to Internap have been acquired at approximately 15.8x estimated LTM EBITDA while Internap continues to languish at just 8.4x 2015E EBITDA
- leading data center M&A bankers have confirmed to RDG that there are numerous strategic acquirers who would likely have potential interest in acquiring Internap if the Board were to conduct a public sale process
As a result, RDG is confident that Internap could be sold at a significant premium if the Board acts promptly. RDG believes there is majority shareholder support for a sale of the Company based on the recent 13d filing of Discovery Group and discussions RDG has had with numerous fellow shareholders.
With the data center M&A market at an all-time high and experienced M&A bankers confirming the likelihood of strong acquisition interest in Internap, RDG believes it is not only good business judgment but also the Board's responsibility to pursue a sale process that could benefit shareholders, especially when shareholders the Board has been elected to represent want the Board to explore a sale.
Even Internap CEO Mike Ruffolo recently acknowledged on the Company's Q2 call that it is the Board's "fiduciary responsibility" to "look for" all strategic opportunities to serve the best interest of shareholders. Accordingly, to fulfill this commitment requires the Board to conduct a public sale process.
While shareholders expect to see the accelerated profit growth the Board has forecasted in upcoming quarters, RDG believes improving operating performance and conducting a sale process are not mutually exclusive efforts to enhance shareholder value.
In response to a request for board representation by RDG, the Board has acknowledged it will review the composition of the Board and consider Russell Glass as a director candidate at its upcoming Nominations and Governance Committee meeting. RDG believes the appointment of Mr. Glass to the Board would add extensive M&A investment experience, improve shareholder representation, and instill greater confidence among shareholders that the Board is demonstrably responsive to shareholder input.
RDG has offered to meet with the Board to discuss these important matters at the Board's earliest convenience.
The full text of the letter can be found here.
About RDG Capital Fund Management
New York-based RDG Capital Fund Management ("RDG") is a private investment firm founded by Russell Glass, the former President of Icahn Associates. RDG manages investment funds which primarily focus on undervalued companies with identifiable catalyst opportunities to enhance shareholder value.
Important Disclosures
Any views expressed herein represent the opinions of RDG, whose analysis is based solely on publicly available information. No representation or warranty, express or implied, is made with respect to the accuracy, timeliness or completeness of the information contained herein. RDG expressly disclaims any and all liability based, in whole or in part, on such information, any errors therein or omissions therefrom. Any opinions expressed herein are subject to change without notification. Forward looking statements involve certain risks and uncertainties and assumptions. Actual results may differ materially from those contained in forward looking statements. RDG does not assume any obligation to update, correct or revise the information contained herein. RDG intends to review its managed funds' investment in the Company on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the outcome of any discussions referenced above, the Company's financial position and strategic direction, actions taken by the Board, price levels of the Company's shares, other investment opportunities available to RDG, conditions in the securities market and general economic and industry conditions, take such actions with respect to its managed funds' investment in the Company as it deems appropriate, including, without limitation: (i) acquiring additional shares and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of the shares or the Company in the open market or otherwise; (ii) disposing of any or all of such securities or instruments in the open market or otherwise; or (iii) engaging in any hedging or similar transactions with respect to such securities or instruments. Figures may represent estimates of RDG or third parties and may not be indicative of future results. There is no assurance or guarantee with respect to the prices at which any securities of the Company will trade, and such securities may not trade at prices that may be implied or stated herein. The estimates and pro forma information set forth herein are based on assumptions that RDG believes to be reasonable, but there can be no assurance or guarantee that actual results will not differ materially. The information contained herein does not recommend the purchase or sale of any security nor is it an offer to sell or a solicitation of an offer to buy any security. Furthermore, the information contained herein is not intended to be, nor should it be construed or used as, investment, tax or legal advice. No representation or warranty is made that RDG's investment process or investment objectives will or are likely to be achieved or successful or that RDG's managed funds' investments will make any profit or will not sustain losses. Past performance is not indicative of future results. Nothing contained herein should be taken as any form of commitment on the part of RDG to take any action in connection with any particular security. RDG and its affiliates are in the business of buying and selling securities. They have, and may in the future, buy, sell or change the form of their position in the Company or any security for any or no reason whatsoever. RDG has neither sought nor obtained the consent from any third party to use any statements or information contained herein that have been obtained or derived from statements made or published by such third parties which RDG may not be able to independently verify. Any such statements or information should not be viewed as indicating the support of such third parties for the views expressed herein. Furthermore, RDG makes no representations or warranties as to the accuracy, timeliness or completeness of such information.
Contact: Ryan Schoenig
RDG Capital Fund Management LP
(212) 407-2199
[email protected]
SOURCE RDG Capital Fund Management
Share this article