Daventry Group Demands Sale of Kinaxis – Investor Sees Significant Potential

The investment firm Daventry Group has called on the Canadian software company Kinaxis to put itself up for sale, highlighting the company as a valuable asset for which many buyers would pay an attractive premium. Daventry, an investor in Kinaxis since March 2021, informed the board that years of missteps have led to the supply chain management software provider being undervalued. However, new owners could quickly rectify these issues. According to Daventry, the problems at Kinaxis are not product- or market-related but are mainly "self-inflicted and execution-related." In a letter seen by Reuters, it was noted that Kinaxis offers some of the "stickiest software products in the world." The letter clarified that Kinaxis's stock has fallen by nearly 20% since the end of 2020, while competitors like Manhattan Associates have seen stock gains. "The board should promptly initiate a sales process and allow another organization—be it a strategic or financial sponsor— the opportunity to unlock the value of Kinaxis and leverage its strong competitive position," demanded the Daventry Group. A company representative was initially unavailable for comment. The investment firm, which, along with its subsidiaries, holds about 1.4% of Kinaxis's outstanding shares, expressed its recommendation just weeks after the company announced that long-time CEO John Sicard would step down by the end of the year. Daventry fears that the current board and chairman Bob Courteau may struggle to find an adequate successor for Sicard. The recent leadership changes have left "a significant leadership vacuum at Kinaxis during the prime sales months of the year," which, according to Daventry, makes the immediate start of a sales process urgently necessary.