“There are big value arbitrages to be had in the Canadian market,” says investor Matt Proud of Plantro Ltd.DUANE COLE/The Globe and Mail
A year ago, Matt Proud was under siege from activist investors trying to effect changes at Dye & Durham Ltd. DND-T, including his ouster as chief executive.
Since then, Mr. Proud has become an activist shareholder to be reckoned with in his own right.
After leaving D&D last December, the 44-year-old entrepreneur has targeted three Toronto Stock Exchange-listed companies through his private holding company Plantro Ltd.: Information Services Corp. (ISC), Calian Group Ltd. – and D&D. Each has paid off so far.
And Mr. Proud isn’t finished. “There are big value arbitrages to be had in the Canadian market,” he said in an interview. “A lot of companies are trading at discounts to where they should be. Until that is solved, it creates opportunities for companies to unlock value through things such as strategic reviews and sale processes.” He said he will likely target another Canadian company “in the near to medium term.”
Plantro claimed victory Monday as Regina-based ISC ISC-T said it was launching a strategic review that could lead to the company’s sale. ISC provides registry and information management services for public data and records. The move is backed by a Saskatchewan Crown corporation that owns 29.3 per cent of ISC shares and has several board seats. Its stock hit an all-time high Monday on the news.
Plantro last spring launched a mini-tender to buy 15 per cent of ISC’s Class A shares for $27.25 each (later increased to $30). ISC called its bid “abusive and coercive” at the time. The two had a history: ISC once owned 30 per cent of D&D when it was private. It sold the stake back to the company in 2017 after D&D bought ISC competitor OnCorp Direct Inc.
Mr. Proud had pushed to shake up ISC’s board and make a strategic investment before launching his bid, believing the company was undervalued. ISC has healthy cash flows and long-term contracts with provincial governments.
Plantro only picked up 3.13 per cent of the stock with its bid, but later increased that to 5 per cent – giving it enhanced shareholder powers. Last week, it went on the offensive, requesting a special meeting to replace the ISC board’s seven non-government directors with four hand-picked nominees, including two former D&D executives, and cut the board’s size to seven members, from 10.
ISC did not acknowledge Plantro in its release, but Mr. Proud’s firm withdrew its request and he said it “was 100 per cent the driving force behind this. They still have to run the process but the government is supportive. I believe the company will run a robust process. I’m really happy.”
Plantro also turned the tables on Mr. Proud’s former company this year. Mr. Proud quit D&D as CEO last fall under pressure weeks before a board slate nominated by activist hedge fund Engine Capital swept into power. But after D&D stock sagged, Plantro offered to buy the company early this year. It then increased pressure on the board to sell the company and requested a special meeting to elect three directors to replace a trio who joined last December.
In July, D&D and Plantro reached a standstill deal that saw the board launch a strategic review that could lead to a sale. Chairing the review committee was Plantro nominee David Danziger, who joined the board as part of the deal. The stock jumped to its highest level in months on the news. Mr. Proud said he is “optimistic about the ultimate outcome” at D&D.
Mr. Proud’s third campaign is a departure. In late 2024, he started looking at Canadian defence vendors, believing they would benefit from an increase in government military spending. He zeroed in on Calian CGY-T, an Ottawa information-technology services company that derives much of its revenues from defence contracts.
Plantro bought a 5-per-cent stake and Mr. Proud visited CEO Kevin Ford last month to press Calian to sell its underperforming IT and cybersolutions business – or the whole company – and focus on defence. Plantro also wrote the board to press its views, saying Calian had a “once-in-a-generation growth opportunity” to capitalize on higher defence spending. News of Plantro’s entreaty caused the stock to jump.
Calian defended its strategy, including maintaining a diversified platform of offerings. It also launched a bid to buy back up to 10 per cent of its stock. Last week, Mr. Ford told BNN Bloomberg the division in Plantro’s crosshairs was “critical” to its business.
Mr. Proud said his campaigns build on his experience as a “hands-on” investor with a knack for backing undervalued technology and services companies. He’s looking for cash-flow generating businesses with solid “moats,” which ISC has with long-term exclusive contracts with governments, as does Calian with its long-standing defence contracts. “These things are hard to replicate.”