Activist hedge fund firm Engaged Capital has settled with another one of its targets.
The firm headed by Glenn Welling reached a cooperation agreement with Del Frisco’s Restaurant Group, which owns four restaurant chains. Under the deal, Del Frisco’s agreed to expand the size of its board by one director and appointed an Engaged nominee, Joseph Reece, to sit on its staggered board of directors. He was also appointed chairman of the transaction committee. The company also agreed to terminate its short-term shareholder rights plan.
“Joe will bring a new perspective to the boardroom and support the Company’s efforts to drive growth and enhance shareholder value,” said Norman Abdallah, chief executive officer of Del Frisco’s, in a press release. “We look forward to furthering our constructive relationship with Engaged Capital.”
The truce was announced just two months after Engaged revealed that it owned slightly less than 10 percent of the shares and urged the company to name key shareholders to its board and form a review committee to evaluate strategic alternatives.
Engaged Capital is one of the busier activists these days, even though it is not as well-known as some others.
Last week Engaged nominated three individuals, including Welling, to the board of directors of Benchmark Electronics, a provider of contract manufacturing services.
This is the hedge fund’s second proxy fight launched against the company. Two of Engaged’s director nominees were elected to Benchmark’s board at its 2016 annual meeting.
Meanwhile, this past September, Focus Brands completed its $200 million acquisition of smoothie and juice franchisor Jamba. Engaged had disclosed its activist stake in the company in 2014, and Welling sat on the board of directors.
Back in April, Engaged also filed initial 13Ds (filings with the Securities and Exchange Commission indicating activist stakes) on two other companies: Apogee Enterprises, which creates frames for commercial buildings, and Aratana Therapeutics, which develops therapeutics for dogs and cats.
In March Engaged nominated three individuals to Aratana’s board of directors. In May Aratana named two of the hedge fund’s nominees to its board as part of a cooperation agreement.
Newport Beach, California-based Engaged was founded by Welling in 2012 with an $85 million seed investment from Grosvenor Capital Management. It now manages about $750 million.
Before launching his hedge fund firm, Welling was a principal and managing director at Relational Investors, a $6 billion activist firm, where he was responsible for managing the equity fund’s consumer, healthcare, and utility group. Before that, he was the head of Credit Suisse Group’s investment banking department’s advisory business.
Engaged Capital targets companies with a market capitalization of between $500 million and $8 billion, focusing on small-to-midsized companies that don’t attract large, well-known activists.
Since its inception, it has launched 17 activist campaigns. It has won three proxy contests and settled with 12 companies.
Welling also sits on the board of directors of TiVo Corporation, a provider of digital entertainment technology services, where he is the compensation committee chair and a member of the strategy committee and the corporate governance and nominating committee, and The Hain Celestial Group, the organic and natural products company, where he is a member of the compensation committee and strategic working group.
He previously sat on the boards of Jamba and weight-loss company Medifast.
