This article was first published on Activist Insight Shorts on September 2, 2021. For more information about the product, click here.
Activist investor Coast Capital has called on U.K.-based automation software provider Blue Prism to make operational changes to close the valuation gap, indicating it opposes a potential sale to U.S. private equity firms.
“We have asked that BluePrism consider effecting operational changes which we have no doubt will lead to a notable improvement in product offering, customer experience, and in turn revenue growth and margins. This in turn would help close the nearly 80% valuation gap between the company and its most pertinent peers,” Coast Capital’s founder James Rasteh has told Activist Insight Online in an email.
Blue Prism, a software corporation that makes enterprise robotic process automation, has reportedly generated buyout interest from U.S. private equity groups TPG Capital and Vista Equity Partners. Shares have surged more than 40% over the past few days. However, they remain down more than 53% from their peak in September 2018.
The selloff in Blue Prism shares accelerated in late 2020 after short seller ShadowFall Capital & Research accused the company of shady accounting, while also noting that it is falling behind competitors UiPath and Automation Anywhere in terms of growth rate, funding, and market share.
Blue Prism currently trades at a price-to-sales ratio of around 8.2, while UiPath, its U.S.-based publicly-listed competitor, is valued at 51 times sales.