OREANDA-NEWS. Fitch Ratings views the recent agreement between The Brink's Company (Brink's) and Starboard Value LP, together with its affiliates (Starboard), as positive to the extent that the parties were able to avoid a protracted proxy battle that might have distracted senior management from the turnaround process.

On Jan. 3, 2016, Brink's and Starboard entered into an agreement appointing Ian D. Clough, George I. Stoeckert and Peter A. Feld, a Managing Member of Starboard, as directors of the company, effective immediately. Mr. Clough, Mr. Stoeckert and Mr. Feld will stand for elections as nominees of Brink's at the 2016 annual shareholder meeting alongside incumbent director Paul G. Boynton.

Incumbent Brink's directors Murray D. Martin and Ronald L. Turner have retired from the board and the company bylaws have been amended growing the size of the board from eight to nine. The agreement further provides that Mr. Feld will be the chairmen of the company's Corporate Governance and Nominating Committee, which will oversee the process of searching for a new chief executive officer following the retirement of Thomas C. Schievelbein. The agreement further provides that each committee of the board will include one of the newly appointed directors.

Under the agreement, Starboard has agreed not to, among other things, solicit proxies regarding the election of directors, enter into a voting group with other shareholders, encourage nominees for further election or removal of directors, or submit any proposal for consideration by stockholders. The standstill provisions expire no earlier than 130 days prior to the anniversary of the company's 2016 shareholder meeting. Starboard has also generally agreed to vote all shares of Brink's common stock that is beneficially owned by Starboard in accordance with the company's recommendations at the 2016 annual shareholder meeting. The agreement further states that the board has agreed to elect a non-executive Chairman of the Board, who must be reasonably acceptable to Starboard as Mr. Schievelbein was also the Chairman.

As the largest current shareholder with 12.3% of the firm's common stock, Starboard initially disclosed a large stake in Brink's in May of 2015 and summarized its concerns in a letter to the company released on October 5, 2015. Principle among Starboard's concerns in that letter was the slow pace of Brink's operational turnaround and underperformance relative to its peers over the past five years. At this time, Fitch expects the new board members and future CEO to focus on EBITDA margin improvement rather than a major acquisition or share repurchases to drive shareholder value.

In a recent special report titled, 'Activist Investors: Fall 2015 (Nonfinancial U.S. Corporate Campaign Case Studies and Profiles of Notable Activists),' Fitch provides a multisector view of activism and evaluates factors that may help assess the risk that an activist could emerge or agitate for change. The report includes case studies of 14 large investment-grade firms that have faced activist campaigns since 2013 and profiles of 10 prominent activists.