A new sheriff at Veradigm? A stiffly written press release from Veradigm announced Big Changes to its board of directors–and an agreement with a major shareholder, Kent Lake PR LLC. The cooperation agreement with Kent Lake adds four independent directors, two effective on 20 February and two to be named later subject to Kent Lake’s approval. The two immediate additions are Vinit Asar and Louis Silverman. Mr. Asar is the former CEO, now executive chairman of Hanger, Inc., a medical services provider. Mr. Silverman is CEO of Hicuity Health, which provides telemedicine services to high-acuity care settings.
Current long-time chairman Greg Garrison will retire following the filing of the 2022 Form 10-K, expected shortly. Board member Jonathan Judge, previously CEO of Paychex and on the board for nearly nine years, stepped down on 14 February. He was chair of the nominating and corporate governance committees, according to his listing on the Veradigm website (still up). Board member and audit committee chair Beth Altman previously resigned on 28 January for stated health reasons.
In January, Veradigm announced that efforts to sell, which looked promising at the end of 2024, had failed to sell the whole company or assets and that the board was examining, with an unnamed strategic advisory firm, a standalone future [TTA 31 January]. According to the current release, the current board asked for shareholder input regarding board composition and ‘refreshment’. Reading between the lines of the release, it was both an agreement and a settlement of some kind with Kent Lake, a major shareholder of Veradigm, and the only one mentioned. Kent Lake PR reportedly owns 3% and Kent Lake Capital an additional 3%. Both are based in Puerto Rico. The release prominently features a statement by Benjamin Natter, managing member of Kent Lake Capital, on how changes to the board will promote delivering value to customers and the healthcare system while also generating “attractive returns to shareholders”. Veradigm is currently valued at $527 million.
Also stated in the release is that new members will add “deep strategic planning, finance, healthcare and restatement experience.” Interestingly, Vinit Asar is also experienced in the latter, having steered Hanger through a financial restatement and NYSE delisting process. In this case, Veradigm is concentrating on becoming current with its financial statements from 2022 in order to get relisted on Nasdaq.
It is clear that one major shareholder decided to go Full Activist and force changes at Veradigm after the possibility of a sale evaporated like a snowball in July. Reuters
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