Jeff Lawson CEO, Twilio
Scott Mlyn | CNBC
Cloud software program developer Twilio has employed Qatalyst Partners, the funding financial institution based by Frank Quattrone, to advise on its protection towards a bunch of activist traders, in line with two individuals with data of the matter.
Qatalyst, which beforehand suggested Segment when Twilio bought it for $3.2 billion in 2020, has been engaged on the activist matter for months, one of many the individuals mentioned. Qatalyst launched an activist apply the identical 12 months because the Segment deal. While Qatalyst has usually labored to assist corporations promote themselves, this task is concentrated on the activist protection scenario, mentioned these individuals.
Both sources requested to not be named resulting from confidentiality. Twilio’s expertise makes it simpler for corporations to speak with prospects and workers by cell units.
Legion Partners, an activist agency based mostly in Los Angeles, took a stake in Twilio earlier this 12 months and started pushing the corporate to overtake its board and technique. Legion’s engagement was led by Sagar Gupta, who left the agency in October for Anson Funds, the place he amassed the same stake.
Twilio shares have gained 45% this 12 months, however that follows a depressing 2022, throughout which the corporate misplaced greater than 80% of its worth. The inventory is 84% off its report reached in early 2021. Annual income development slipped to only 5% in the latest quarter down from over 30% in the identical interval final 12 months and over 60% within the third quarter of 2021.
The activist teams have instructed Twilio it ought to a minimum of promote an underperforming unit, its information and purposes enterprise, which incorporates Segment. Twilio CEO Jeff Lawson, who co-founded the corporate in 2008, mentioned final week that the corporate would lay off 5% of its workers, with the deepest cuts inside the information and purposes unit.
The downsizing adopted a company reorganization earlier this 12 months that included layoffs amounting to 17% of Twilio’s workers.
Qatalyst is greatest recognized for its mergers and acquisitions apply moderately than shareholder protection. One of the individuals aware of the matter mentioned the financial institution’s present involvement with Twilio shouldn’t be a precursor to a sale of the corporate.
A spokesperson for Twilio declined to remark. Qatalyst didn’t reply to a request for remark.
Qatalyst was based in 2008 by Quattrone, who stepped down as CEO in 2016 however stays govt chairman. The agency has suggested on a few of Silicon Valley’s largest current offers, together with Microsoft’s $28.1 billion acquisition of LinkedIn, Salesforce’s $29.2 billion buy of Slack and Block’s $22 billion acquisition of Afterpay. Qatalyst additionally labored on Cisco’s pending $29.6 billion acquisition of Splunk and Adobe’s buy of Figma, which is awaiting regulatory clearance.
Qatalyst’s activist apply is helmed by Peter Michelsen, who was employed in June 2020 from Goldman Sachs‘ activist advisory group. Michelsen says on his LinkedIn web page that he advises “Qatalyst’s clients across all technology sectors on matters including activism defense, proxy fights, contested situations, defense preparedness and complex ESG matters.” ESG stands for environmental, social and company governance.
— CNBC’s Alex Sherman contributed to this report.
WATCH: Twilio CEO says firm is concentrated on prospects, not opponents
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