Investing.com -- Blackline Inc (NASDAQ:BL) faces a fresh wave of activist scrutiny following a regulatory filing by San Francisco-based Fivespan Partners. The hedge fund disclosed a 5.1% stake in the software company on Thursday evening, just two days after a separate settlement with Engaged Capital.
Fivespan, led by Managing Partner Dylan Haggart, spent approximately $138.6 million to accumulate over 3 million shares. According to the Schedule 13D filing, the firm intends to engage management on issues including "board composition" and "mergers and acquisitions strategy."
The disclosure arrived shortly after BlackLine announced the appointment of technology M&A veteran Storm Duncan to its board and Strategic Committee. The committee is tasked with evaluating "strategic transactions involving the Company," Lead Independent Director David Henshall said in the announcement from Tuesday.
Engaged Capital, which facilitated the board appointments through a cooperation agreement with BlackLine, emphasized the necessity of independent oversight for the software maker. "Storm has decades of experience in technology M&A and brings invaluable experience and independence to the Board and the Strategic Committee," stated Glenn W. Welling, founder of Engaged Capital.
The intensified activist presence follows market reports from last year saying that the company previously bypassed a significant acquisition offer from SAP. The enterprise software giant reportedly extended a $66 per share bid last spring, Reuters reported in October, a valuation nearly double the stock's recent trading levels. The October report also said SAP was weighing a new bid for the company.
BlackLine Chairman and CEO Owen Ryan maintains that the company is currently executing a clear plan focused on accelerating revenue growth. Ryan said on Tuesday, "We recognize that we have further to go, but the progress realized over the past few years and our focus on bringing our AI capabilities to our customers puts BlackLine in a strong position."
Despite management's optimism, Fivespan noted in its filing that it believes BlackLine's securities are currently undervalued. The firm signaled it may seek further changes, including "whether it makes sense for a Fivespan employee to be on the Issuer's board of directors."
BlackLine shares were trading up 1% in early afternoon trade following the filing. Representatives for Fivespan, BlackLine, Engaged Capital, and SAP have yet to respond to Investing.com's request for commentary.