Stericycle settles with Saddle Point for two board seats-sources

Stericycle

27/03/2020 11:41

By Svea Herbst-Bayliss
    BOSTON, March 27 (Reuters) - Medical waste company
Stericycle  SRCL.O  and investment firm Saddle Point Management
reached a settlement that hands the firm, founded by a former
Pershing Square Capital Management partner, two board seats,
said two sources familiar the matter.
    Stericycle will expand its 10-member board to 12 people and
offer seats to James Martell, a former XPO Logistics  XPO.N 
director, and James Welch, a former chief executive at YRC
Worldwide  YRCW.O .
    The men were nominated by Saddle Point and bring expertise
in trucking and logistics at a time some Stericycle investors
have asked the $3.8 billion company to cut costs, pay down debt
and sell non-core assets. Saddle Point did not press for any
changes publicly.
    Stericycle and Saddle Point were not immediately available
for comment.
    New York-based Saddle Point was founded two years ago by Roy
Katzovicz, who had been chief legal officer and an investment
team member at William Ackman's activist hedge fund Pershing
Square Capital Management.
    Until now, Katzovicz has largely stayed out of the public
eye. He has made a few behind the scenes investments in
companies including Sprout Pharmaceuticals and BacterioScan Inc,
a point-of-care and rapid diagnostic device development and
manufacturing company.
    Saddle Point requested and received confidential treatment
from the Securities and Exchange Commission to build the stake.
    Stericycle is the dominant U.S. medical waste company that
disposes syringes, used gloves, and bloody bandages among other
things for hospitals and doctors' and dentists' offices. It is
also active in document and data shredding.
    After having gone public in 1996, the company grew by buying
up competitors. Its stock price climbed from $2.31 at the IPO to
$141 in 2015. But rapid growth came at a price and the company's
international expansion was more uneven. Its stock price closed
at $43.15 on Thursday.
    In 2017 the company paid $295 million to settle a
class-action lawsuit which charged the company engaged in a
price-increasing scheme that automatically increased clients'
bills.
    The company last year promoted Cindy Miller to chief
executive after she joined as president and chief operating
officer in 2018 after nearly 30 years at UPS.
    Several prominent activist investors including Carl Icahn,
Elliott Management and Starboard Value have made demands more
publicly and recently agreed to settle for board seats at
companies ranging from Occidental Petroleum  OXY.N to Twitter
 TWTR.N  as the spread of the coronavirus accelerated some
talks.

 (Reporting by Svea Herbst-Bayliss
Editing by Chizu Nomiyama)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))