Engaged Capital Gets Apogee Stake, Urges End to Acquisitions

(Bloomberg) -- Activist investor Engaged Capital has built a position in Apogee Enterprises Inc. and is urging the supplier of glass and other products for skyscrapers to halt its acquisition spree and focus on improving its operations.

Engaged believes Apogee, which counts New York’s One World Trade Center among its customers, is underperforming competitors, the fund’s Chief Executive Officer Glenn Welling said at the 13D Active-Passive Investor Summit in New York.

“It’s a company that has sort of been left behind,” Welling said Tuesday. “It’s one of the few companies that I’ve seen that has such a skewed risk-reward.”

Engaged Capital confirmed its stake of about 6 percent in Apogee in a regulatory filing. The investor has held constructive discussions with the company about ways to improve its performance, according to people familiar with the matter.

The activist hedge fund also wants the company to redirect its free cash to buy back shares, the people said, asking not to be identified because the matter is private.

Engaged believes the company could be worth as much of $75 a share by February 2020 if it implements its recommendations, Welling said. Apogee shares were little changed at $41.41 a share in New York at 2:17 p.m.

Minneapolis-based Apogee, despite its core business being sound, has made a series of missteps, including several large transactions that it has failed to integrate properly, Welling said.

A representative for Apogee didn’t respond to requests for comment.

Welling, a former partner at Relational Investors LLC, formed Newport Beach, California-based Engaged in 2012, which was backed by Grosvenor Capital Management. The firm typically wages activist campaigns at small and midsize companies.

Apogee traces its roots back to a single glass shop in 1949, according to its website. It now operates in three segments serving the commercial construction industry, including architectural framing, glass installation and custom picture framing.

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