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By Svea Herbst-Bayliss
3 Min Read
BOSTON (Reuters) – Medical waste company Stericycle SRCL.O and investment firm Saddle Point Management reached a settlement that hands the firm, founded by a former Pershing Square Capital Management partner, two board seats, said two sources familiar the matter.
Stericycle will expand its 10-member board to 12 people and offer seats to James Martell, a former XPO Logistics XPO.N director, and James Welch, a former chief executive at YRC Worldwide YRCW.O.
The men were nominated by Saddle Point and bring expertise in trucking and logistics at a time some Stericycle investors have asked the $3.8 billion company to cut costs, pay down debt and sell non-core assets. Saddle Point did not press for any changes publicly.
“We are pleased to nominate Jim and James as part of our ongoing commitment to maintain a highly qualified, independent board with an impressive range of expertise to help guide Stericycle in our continued transformation,” said Robert Murley, Chairman of Stericycle.
New York-based Saddle Point was founded two years ago by Roy Katzovicz, who had been chief legal officer and an investment team member at William Ackman’s activist hedge fund Pershing Square Capital Management.
Until now, Katzovicz has largely stayed out of the public eye. He has made a few behind-the-scenes investments in companies including Sprout Pharmaceuticals and BacterioScan Inc, a point-of-care and rapid diagnostic device development and manufacturing company.
Saddle Point requested confidential treatment from the Securities and Exchange Commission to build the stake.
Stericycle is the dominant U.S. medical waste company that disposes syringes, used gloves, and bloody bandages among other things for hospitals and doctors’ and dentists’ offices. It is also active in document and data shredding.
After having gone public in 1996, the company grew by buying up competitors. Its stock price climbed from $2.31 at the IPO to $141 in 2015. But rapid growth came at a price and the company’s international expansion was more uneven. Its stock price closed at $43.15 on Thursday.
In 2017 the company paid $295 million to settle a class-action lawsuit which charged the company engaged in a price-increasing scheme that automatically increased clients’ bills.
The company last year promoted Cindy Miller to chief executive after she joined as president and chief operating officer in 2018 after nearly 30 years at UPS.
Several prominent activist investors including Carl Icahn, Elliott Management and Starboard Value have made demands more publicly and recently agreed to settle for board seats at companies ranging from Occidental Petroleum OXY.Nto Twitter TWTR.N as the spread of the coronavirus accelerated some talks.
Reporting by Svea Herbst-Bayliss; Editing by Chizu Nomiyama
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