SAN FRANCISCO - In a recent move, 2717 Partners, LP, a significant shareholder in Logility Supply Chain Solutions, Inc. (NASDAQ: LGTY), has called on the company's Board of Directors to explore strategic alternatives, including a potential sale. The investment firm, which applies a private equity approach in public markets, expressed concerns over Logility's persistent underperformance and the gap between its current market valuation and intrinsic value. According to InvestingPro data, Logility maintains a strong balance sheet with more cash than debt and generates $102.4 million in revenue.
In a letter sent to Logility's Board, 2717 Partners highlighted the company's underperformance compared to its peers and indexes over one-, two-, and three-year horizons. Despite management's strategic decisions, including divestments and brand expansion, the public markets have not responded favorably. Logility's stock has continued to lag, which 2717 Partners believes indicates that the company is underappreciated by the public markets. Notable is the company's 22-year track record of consistent dividend payments, as revealed by InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US stocks.
2717 Partners suggests that Logility's public market presence may no longer be suitable and that a private market ownership could better serve the company's needs. They argue that private equity could provide the focused shareholder base and expertise necessary to pivot Logility towards profitability. The firm also notes that Logility's recurring revenue model and customer migration initiatives offer visibility into future growth, making it an attractive asset for private equity.
The investment firm has already engaged in discussions with potential private equity and strategic buyers, finding significant interest in Logility. They urge the Board to form a special committee of independent directors and hire an investment bank to maximize shareholder value through strategic alternatives.
As of December 6, 2024, Logility's shares were trading at $10.99. The stock has since risen to $11.56, trading near its 52-week high of $12.27, with InvestingPro's Fair Value analysis suggesting slight undervaluation. 2717 Partners believes that a timely private transaction could offer shareholders a substantial premium over the current trading price.
This call to action comes after Logility eliminated controlling Class B shares in August 2024, granting true ownership to public shareholders for the first time in over 50 years. However, the anticipated positive market reaction has not materialized, prompting 2717 Partners to push for change.
The information for this article is based on a press release statement from 2717 Partners, LP.
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