For the second time in a year, Dye & Durham Ltd. DND-T has made peace with former chief executive Matt Proud, put itself up for sale, parted ways with a chief financial officer and come to a tenuous truce with an activist investor.
The Toronto legal software company also announced a slew of senior level moves, including the hiring of three chief-level officers and departure of a director who joined the board last December.
The spate of changes, announced Tuesday and Wednesday, amount to the latest chapter in one of corporate Canada’s longest-running sagas, and were well received by the market.
Dye & Durham’s moribund stock closed at $11.58 Wednesday, up 27.4 per cent, on investor hopes that the company could fetch the $20 or more per share in a buyout that the previous management claimed prospective buyers were willing to pay. The company has received at least two takeover entreaties this year higher than Wednesday’s close, according to news reports. A prior strategic review was paused in November, 2024 when D&D was mired in its last activist campaign.
“I think we’re now seeing the final season of my favourite daytime soap opera,” said David Barr, CEO of PenderFund Capital Management, which owns 4.5 per cent of D&D stock. “If bids are sufficient, I think this company will transact.”
The truce represents a victory for Mr. Proud, who quit as CEO under pressure last fall as the company headed into a contested shareholder vote at its annual meeting. After being targeted by activist campaigns, Mr. Proud turned the tables this month, requesting through his investment company Plantro Ltd. that D&D hold a special meeting to elect three directors that it nominated, replacing a trio who joined last December. Plantro also pushed to sell the company.
Dye & Durham investor Plantro urges sale of company, documents show
Under a standstill deal between D&D and Plantro, the former said Tuesday it had appointed Plantro nominee David Danziger, a corporate finance veteran, to the board and initiated a strategic review that “may include a sale of the company.” Mr. Danziger will chair the strategic review committee.
Before reaching the agreement, Mr. Proud, who left the board in December, privately threatened to put himself forward as a candidate at the next annual meeting, which he is entitled to do under an investor rights agreement, a source familiar with the matter said. The Globe and Mail is not identifying the source who was not authorized to discuss the matter.
Plantro has now agreed not to nominate Mr. Proud at this year’s meeting. The standstill deal expires at the 2026 annual meeting. It will also end if the board rejects a bid brought forward by the strategic review committee. Mr. Proud said in a release Plantro was “pleased” with the deal.
D&D said in a release that director Ritu Khanna, one of the three Plantro had targeted, had quit to focus on a new job with a San Francisco company with “significant responsibilities and time commitment.”
D&D has been beset by turmoil for most of its five years as a public company. The two brothers who built it – Mr. Proud and ex-chairman Tyler Proud, both large minority shareholders through holding companies – had a falling out that resulted in a prolonged behind-the-scenes battle.
Widespread investor discontent dogged D&D starting in 2021 as shareholders expressed a litany of misgivings about its leadership, direction, debt-fueled acquisition spree and value creation plans.
Customers raged against steep price hikes for its products and the Competition Bureau launched a continuing investigation into alleged trade restricting practices. Britain’s competition regulator forced the company to divest an acquisition there.
Then in February, 2024, hedge fund Engine Capital pressed for board changes at D&D. That culminated in Mr. Proud’s departure, and Engine prevailed in placing its six nominees on the board in an uncontested vote last December after D&D pulled its slate.
The Engine-led board promised to pause deal-making, reduce debt, improve culture and discipline, and build customer loyalty and shareholder value. But the campaign to hire a CEO dragged on, as D&D appointed two interim leaders from its board. Its results disappointed and the stock slumped.
D&D was subject to whistleblower complaints, and this month Plantro accused Engine founder and D&D chair Arnaud Ajdler and another director of misconduct, alleging they tried to force ex-chief financial officer Frank di Lisio to adopt aggressive accounting practices that inflated earnings. In response, D&D accused Mr. Proud of making “unsubstantiated public statements.”
In early June, D&D named LexisNexis senior vice-president George Tisivin as CEO, Avjit Kamboj as CFO and ex-Nielsen executive Nikesh Patel as chief product officer. Mr. Ajdler called the group “a world-class leadership team.” On Wednesday, the company fired Mr. Kamboj, who previously served as D&D CFO from 2019 through 2022, without cause. Three sources familiar with the move said he and the new CEO didn’t get along. The Globe is not identifying the sources, who were not authorized to discuss the matter.
The three new hires are chief marketing officer Chris Louie, former senior vice president of product marketing at Nielsen; chief legal officer Corey Banks; and interim CFO Sandra Bell, who has held similar roles at public and private companies. “It took us longer than we had hoped to get here, but the company now has a complete leadership team in place,” Mr. Ajdler said in a statement.