Southfield-based Covisint Corp. has entered into an agreement with New York-based Dialectic Capital Management LP and its affiliates, which own about 6.2 percent of the company`s outstanding shares, to add three new independent members to the board of directors.
Andreas Mai, John Smith and Jonathan Yaron will join the board, with Smith becoming the nonexecutive chairman.
Shareholders must approve their appointments at the annual meeting later this year, the date for which has not been set.
The company said current board member Homaira Akbari is stepping down to focus on other business endeavors. Philip Lay, who is Covisint`s lead independent director, will retire from the board after the annual meeting.
The company provides cloud-based data sharing and applications for the so-called Internet of Things and was spun off from Detroit-based CompuwareCorp. as a public company in September 2013.
In May, several institutional investors urged the company to appoint more independent directors and possibly pursue a sale.
Covisint had seen its share price lag. It priced its IPO at $10 a share and saw it peak at $13.74 on the opening day. It was the first IPO of a Detroit-area tech company since Syntel Inc. went public in 1997.
Shares opened at $2.11 Friday, up from $1.60 when shareholders went public with their dissatisfaction.
In May, Chevy Chase, Md.-based Roumell Asset Management LLC, which owns 5 percent of Covisint stock, filed a form 13D with the U.S. Securities and Exchange Commission, which included a copy of a letter from company President James Roumell to the Covisint board. It read, in part:
"The fiduciary responsibility of the company`s directors to run an ethical operation that creates shareholder value should be the primary and constant focus of the board. It is now our strong belief that the company should immediately hire a nationally recognized investment banker to review the company`s strategic options, including the potential sale of the company.
"To be clear, Covisint boasts some compelling attributes. First, the company`s technology platform is strong and highly recognized in the automobile industry, underscored by long-term contracts... We believe the company should immediately appoint at least two independent directors to oversee the strategic review process to insure independence and provide shareholders assurance of a genuine and sound process."
Other institutional investors began applying pressure, too.
In June, the company said it would appoint more outside directors.
Covisint was founded in 2000 as an online marketplace by Ford Motor Co., General Motors Corp. and DaimlerChrysler. It struggled to generate revenue and was sold to Compuware in 2004.
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