$QIPT.to - quick update

some interesting (and confusing) developments

Putting out a quick update for QIPT as there was some interesting news recently:

Timeline

• January 24 - QIPT released their annual report.

• January 27 - QIPT released the 14A proxy with their 4 directors being nominated for re-election: Greg Crawford (CEO), Mark Greenberg, Kevin Carter, and Brian Wessel.

• January 28 - Kanen Wealth Management (and related entities) files a 13D after they purchased more share bringing their total to 5.9%. They also indicated that they intended to nominate Selim Bassoul, Jack Feidor, Garrett Larson and Edward Smith at the upcoming AGM.

• January 29 - QIPT released another 14A stating they received a letter from Philotimo Fund (affiliate of KWM) on January 25 indicating they intend to nominate the four directors mentioned above. Although they indicated that KWM had not provided the information required under the Advance Notice Policy.

• January 31 - QIPT released another 14A indicating they received the previously mentioned letter from KWM, but they had not received the information required from KWM to formally nominate the directors they mentioned. But the language in the release wasn’t combative (emphasis mine).

  The Company remains steadfast in its mission to deliver long-term value to all shareholders. As part of the Company’s ongoing commitment to corporate governance, the Board and the Nominating and Corporate Governance Committee of the Board will thoroughly review and evaluate KWM’s notice and any additional requests for compliance with its established procedures under the Company’s Articles and all applicable laws.

  The Company regularly engages with its shareholders and values constructive feedback aimed at strengthening the Company’s performance. We take these engagements seriously and maintain open lines of communication to ensure that shareholder perspectives are heard.

About Kanen

Kanen has been in the news before for going activist on some other companies. Including EZPW, PRTS and BBW. I can’t find any formal performance numbers for KWM. Some of the companies mentioned I couldn’t see the long term value, like EZPW. Others I could understand their involvement, like BBW and PRTS.

The 4 directors mentioned by Kanen

The directors that Kanen mentioned would bring a very high amount of capital markets presence and strong allocation guidance.

Selim Bassoul

• Was CEO of six flags rom nov 2021 to June 2024

  • Is executive chairman now

• Was CEO and chair of Middleby from 2001 to 2019

• Middleby is the real deal. Look at the share price and business performance from what seems like a pretty mundane industry.

Jack Feidor

• CFO and Pres at Watermark Medical since 2009

• Watermark was acquired in 2022 by React health

• Current CEO of watermark was from ResMed

  • Since being purchased by a group of industry investors in 2021, React Health, formerly 3B Medical, has acquired Ventec Life Systems, which makes the VOCSN ventilator; Drive DeVilbiss’ IntelliPAP line of CPAP devices and, most recently, Invacare’s respiratory assets. React has also bought several diagnostic companies, including a home sleep testing company, Watermark Medical; and two cardiac monitoring companies, MediComp (now ReactDx) and Medilynx.

• React Health is owned by a group of industry investors, including Palm Beach Capital and One Equity Partners.

• Watermark Medical is the premier provider of home sleep testing diagnostic services. Recognized as an industry leader in the advancement of Home Sleep Testing, we are dedicated to the pursuit and development of innovative sleep health delivery models utilizing the most advanced technology. More importantly, we are committed to providing consistent quality service to our network of physicians, dentists, employers, and other medical professionals.

Garrett Larson

• Senior analyst at Kanen wealth management

Edward Smith

• CEO of SMTC Corporation, a global Electronics Manufacturing Services (“EMS”) provider focused on partnering with leading original equipment manufacturers and emerging technology companies to provide the full range of end-to-end EMS services, from prototyping and design, to manufacturing and logistics.

• H.I.G. will acquire all outstanding shares of SMTC Corporation’s common stock for $6.044 per share in cash, which represents a premium of approximately 22% over SMTC Corporation’s closing share price on December 31, 2020 and 66% over the share price 60 days ago. The SMTC Corporation Board of Directors has unanimously approved the Merger Agreement and recommends that the Company’s stockholders adopt the Merger Agreement.

• Ed Smith came out of retirement and took over the role of CEO for SMTC in 2017. Prior to SMTC he led SMTEK which went from under $0.50 to over $15.00. He has done over 45 accretive M&A deals in his career.

Closing Thoughts

Not sure what to make of the recent events. Seems like the value is there, but I’m not sure KWM goes “full activist” given the language in the press release.

We are just over a week away from the next conference call, so hopefully we get some color before then.

Thanks for reading my work.

Dean

*long QIPT.to at time of writing.