White Hat Capital Partners: MobileIron Has 'Bright Future' Without Ivanti

White Hat Capital Partners, a long-term MobileIron investor, plans to vote against Ivanti’s planned acquisition of the company.

Late last month, Ivanti announced it’s shelling out $872 million for MobileIron and is acquiring Pulse Secure in a separate deal. Ivanti didn’t divulge the purchase price for Pulse Secure.

If it doesn’t see a better deal, White Hat Capital Partners will vote its shares against the MobileIron transaction.

MobileIron provides mobile-centric unified endpoint management products and services.

MobileIron’s board of directors unanimously approved the deal and recommended stockholders vote their shares in favor of the transaction.

When contacted, MobileIron didn’t comment on White Hat Capital Partners’ opposition to the deal.

MobileIron has ‘Standalone Potential’

White Hat Capital Partners’ David Chanley

David Chanley and Mark Quinlan, White Hat Capital Partners managing partners, sent a letter to MobileIron‘s board of directors. In it, they said MobileIron is a “growth story with a bright future.”

Public shareholders deserve to participate in its “standalone potential, or, at a minimum, receive a change-in-control transaction price that fairly values it,” they said.

White Hat has been a MobileIron investor since June 2018. Its investment “rests on our independent analysis of the company’s future value and on management’s ability to deliver on that value,” it said.

“As the management team at MobileIron should know, we seek to be collaborative, engaged partners with the companies in our portfolio, with the aim of developing productive and good faith relationships,” Chanley and Quinlan said. “Our expectation is that long-term value creation is the shared goal that forms the fundamental basis of these relationships. It was with significant surprise, therefore, that we read about the contemplated transaction with Ivanti.”

White Hat Capital Partners’ Mark Quinlan

Unlike many companies adversely affected by COVID-19, MobileIron’s senior management has publicly stated the company’s business clearly benefits from the transition to work from home, they said.

“This combination of strong operating results, optimism routinely and publicly expressed by the company’s senior management, and MobileIron’s strong balance sheet does not seem to square with the decision to sell the company at a disappointingly low price,” Chanley and Quinlan said.

They also said it appears Ivanti is dictating the timing and structure of the acquisition. And MobileIron’s board didn’t create a level playing field or a “competitive dynamic” among others interested in acquiring the company.

Purchase Price Too Low

MobileIron’s standalone value exceeds the purchase price, Chanley and Quinlan said. Its forecasts show significant value creation as an independent company. Its most recent earnings call highlighted solid record quarterly revenue. There was 20% year-over-year growth in cloud-based revenue and 13% year-over-year growth in subscription annual recurring revenue.

“We fully appreciate the industrial logic for combining Ivanti, MobileIron and Pulse,” they said. “The powerful and unique platform will surely benefit MobileIron’s continuing employees as well as the company’s customers. As a long-term shareholder, however, we are deeply frustrated that MobileIron’s board failed to negotiate a fair price for the sale of the business.”

MobileIron isn’t a “tired company ready to depart the public market,” Chanley and Quinlan said.