Advance Auto Parts is appointing three new board members after hedge funds Third Point LLC and Saddle Point Management took positions in the automotive afterparts provider, the company said.
The company will add executives with automotive supply chain and merchandising expertise to sit on its board which currently has nine members.
The board refreshment comes only six months after the company picked Shane O’Kelly, a former US Army captain who had held senior roles at Home Depot, to replace Tom Greco as chief executive.
Armed with a mandate to turn the company around, O’Kelly arrived in September after Advance Auto Parts’ stock tumbled last year and around the time S&P Global Ratings downgraded its debt to “junk.”
The company’s financial performance and stock price also lagged behind rivals AutoZone and O’Reilly Automotive.
As part of the turnaround plan, Advance Auto Parts is in the process of trying to sell Worldpac, the wholesale distributor of original equipment automotive parts it acquired in 2014 when it bought General Parts International.
Joining Advance Auto Parts’ board immediately are: Brent Windom, who had been CEO of automotive refinish, industrial coatings and automotive aftermarket parts distributor Uni-Select; Gregory Smith, executive vice president at medical device company Medtronic, and Thomas Seboldt, who spent much of his career at O’Reilly Automotive.
Third Point, run by billionaire investor Daniel Loeb, and Saddle Point, run by former Pershing Square Capital Management partner Roy Katzovicz, teamed up on the investment last year after Saddle Point had begun researching the company in 2022, sources familiar with the matter told Reuters.
The two firms now have under 5% in beneficial ownership in Advance Auto Parts.
Both Third Point and Saddle Point have pursued an activist playbook with Loeb most recently threatening a proxy fight at Bath & Body Works last year.
The two funds are now the first activists Advance Auto Parts has faced after Starboard Value took a position and the firm’s chief investment officer, Jeffrey Smith, joined the board in 2015.
He stepped down in 2020.
Smith helped bring on director Eugene Lee, who had been chief executive officer of Darden Restaurants, and became chairman of the board at Advance Auto Parts in 2020.
