Autodesk Said to Be Targeted by Activist Ferguson's Sachem Head

  • Fund says co undervalued, `intend to engage in discussions'
  • Autodesk makes design software for architects, engineers

Autodesk Inc., the maker of architectural and engineering design software, is being targeted by activist investor Sachem Head Capital Management.

The fund run by Scott Ferguson has amassed a new stake of about 5.7 percent, and views the stock as “undervalued,” it disclosed in a 13D regulatory filing Wednesday. Sachem Head intends “to engage in discussions” with Autodesk’s management and directors on issues including “business, management, operations (including cost structure), assets, capitalization, financial condition, strategic plans, governance and board composition.” New York-based Sachem Head has more than $4 billion under management.

Autodesk, based in San Rafael, California, has a market value of about $13 billion. Chief Executive Officer Carl Bass has run the company since 2006 and has been moving it toward cloud-based software subscription services, which generally boost recurring revenue and earnings longer term.

The company makes 3D design software also used to create visual effects for movies and video games. At its investor day Sept. 29, Autodesk reiterated its forecasts for the 12 months ending Jan. 31, 2016. The shares dropped 3.5 percent this year through Tuesday.

“We have recently learned of Sachem Head’s new position in Autodesk,” said Noah Cole, a spokesman for the company. “As always, we are open to constructive dialogue with any Autodesk shareholders, large or small.”

Sachem Head was founded by Ferguson in 2012 after he left activist Bill Ackman’s Pershing Square Capital Management, where he was one of the first investment professionals hired.

The firm has previously targeted companies including CDK Global Inc., the information technology provider to automobile dealers spun off from Automatic Data Processing Inc., and animal health-care group Zoetis Inc. It ran an earlier campaign at hair-care products maker Helen of Troy Ltd.

Activist investors tend to buy at least 5 percent of a company’s stock and flag their intention to actively engage corporate executives and directors to boost shareholder returns by disclosing their holding in a 13D filing with the U.S. Securities and Exchange Commission.

Before it's here, it's on the Bloomberg Terminal.