BlackLine settles with activist, lets strategic committee lay groundwork for sale

By Svea Herbst-Bayliss

NEW YORK, March 10 (Reuters) - BlackLine said its strategic committee can lay the groundwork for a potential merger or sale, a move some of ‌the software maker's investors have pushed for, according to a regulatory filing made ‌late on Tuesday.

The committee can "explore, evaluate, consider, review, negotiate and, as appropriate, recommend to the board for approval ​a potential business combination transaction or other similar strategic transaction involving the Company," according to the charter for the strategic committee. The charter was released in an 8K filing after the market close.

Earlier on Tuesday, the company announced it had reached an agreement with hedge fund Engaged ‌Capital after the activist investor had ⁠signaled two months ago that it would try to add new directors to the board who would be able to pursue strategic options, ⁠including a possible sale, Reuters reported in January.

BlackLine named Storm Duncan, a technology-focused investment banker who was proposed as a director by Engaged, and Megan Prichard, an Uber executive who has experience with ​companies ​in disruptive technologies and high-growth industries, as new ​board members.

Duncan will be one of ‌four directors to sit on the strategic committee along with Scott Davidson, Gregory Hughes and David Henshall, BlackLine's lead independent director and chair of the strategic committee. "Storm's skillset will be additive to the strategic committee, which has been, and continues to be, empowered to evaluate strategic transactions involving the company," Henshall said.

BlackLine has a market value of $2.15 billion and its stock ‌price has tumbled 33% since January to close ​at $36.16 on Tuesday. Software companies including BlackLine saw their ​stock prices tumble several weeks ago amid ​growing fears that artificial intelligence will pose business risks to the ‌sector.

Last year, Reuters reported that SAP, Europe's ​largest software provider that ​has a strategic partnership with BlackLine, offered to buy the company for nearly $4.5 billion but was rebuffed.

Engaged, which is run by Glenn Welling, has been in business for ​more than a decade and ‌has pushed for changes at a number of firms, including Envestnet and New ​Relic, which eventually put themselves up for sale.

(Reporting by Svea Herbst-Bayliss; Additional ​reporting by Milana Vinn; Editing by Lisa Shumaker)