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OC Insider: Board Battles

Activist investor Politan Capital’s battle against Masimo (Nasdaq: MASI) is approaching the two-year mark.

So far, it’s been a losing battle, based on stock performance; the Irvine-based company’s shares are off more than 10% since August 2022, when Quentin Koffey first disclosed a significant stake in OC’s second-most valuable publicly traded device maker.

The S&P 500 is up roughly 30% over the same period. Masimo is now valued around $7B.
Koffey has made inroads on Masimo’s six-person board over that time, though, adding two members, and he could well add another two next month, depending on an upcoming proxy vote.

See Peter J. Brennan’s front-page story for thoughts from Masimo CEO Joe Kiani on the proxy battle, and what changes could be in store for Masimo if the votes go in Politan Capital’s favor.

“I worry for the future of Masimo,” Kiani told Brennan, suggesting there could be an exodus of key employees if he loses the board vote.

Kiani could well be one of those leaving, as there are other firms circling “who would like to recruit” the company co-founder, who “is named as an inventor on over 900 of Masimo’s patent filings,” including several new, successful company products, according to a recent letter to shareholders.

The same June 17 letter to Masimo investors mentions the word “innovation” 17 times, highlighting the device maker’s long-term focus on R&D, which Joe Kiani’s backers assert is needed in its current push “to achieve a 30% operating margin while maintaining its historical organic growth.”

The focus on R&D would likely be “jettisoned” if Politan Capital gets control of the board, the letter suggests.

Claims of overspending on R&D were lobbed at David Pyott and Allergan during the then Irvine-based drugmaker’s hostile takeover battle with activist investor Bill Ackman and Valeant nearly eight years ago.

The drugmaker ended up eliminating large parts of its local R&D staff, along with several other departments, as a result of that battle, and as a result of multiple company sales that followed the ultimately unsuccessful takeover battle.

Gavin Herbert has returned to Allergan, sort of.

Herbert, the co-founder of the Irvine-based pharmaceutical firm that long was OC’s largest public company, now serves as chairman of San Clemente’s Regenesis Remediation Solutions, which makes products used for soil and groundwater remediation.

A Regenesis van was seen earlier this month at the current campus of Allergan Aesthetics.

No word on what, if any, contaminants the company was treating in Irvine.
Botox isn’t considered a forever chemical.

Mark Wahlberg’s flagship restaurant Flecha, which has the same name as the tequila brand the actor is an investor in, opened earlier this month at the Bella Terra shopping center in Huntington Beach.

The tequila served as a substitute for holy water during the opening, which saw the restaurant blessed by Diocese of Orange Christ Cathedral Bishop Kevin Vann, which was a request from Wahlberg.

See Emily Santiago-Molina’s story on page 11 for more on the restaurant opening, along with several stories throughout this week’s print edition, as part of the Business Journal’s Tourism Special Report.

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Sonia Chung
Sonia Chung
Sonia Chung joined the Orange County Business Journal in 2021 as their Marketing Creative Director. In her role she creates all visual content as it relates to the marketing needs for the sales and events teams. Her responsibilities include the creation of marketing materials for six annual corporate events, weekly print advertisements, sales flyers in correspondence to the editorial calendar, social media graphics, PowerPoint presentation decks, e-blasts, and maintains the online presence for Orange County Business Journal’s corporate events.
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