Corvex Takes Fortrea Stake Following Fellow Activist Starboard

(Bloomberg) — Corvex Management LP has taken a stake in Fortrea Holdings Inc., a clinical trials management company that was spun out of Labcorp Holdings Inc.
The activist investor contends the company could be worth $25 to $27 a share once it improves its margin on earnings before income, taxes, depreciation and amortization, said Corvex Chief Investment Office Keith Meister. 
Fortrea should also consider selling non-core assets, Meister said during a presentation at the 13D Monitor Active Passive Investor Summit on Tuesday.
The company could either improve its margins or become a target for buyers including financial sponsors, Meister said. Fortrea could be valued in a buyout at a premium of about 40%, he added.
Fortrea’s underperformance is due to spin-related disruption, Meister said.
The company’s shares, which have fallen 49% this year, closed down 6% to $17.80 each on Tuesday. The shares rose more than 5% after the close of regular trading.
A representative for Durham, North Carolina-based Fortrea didn’t immediately respond to requests for comment.
Corvex invested in Fortrea after another activist investor, Starboard Value LP, disclosed its stake in the company last year. 
“Imitation is the greatest form of flattery,” Meister said in his presentation themed Following Other Activists. “Investing behind activists allows us to benefit from their hard work sometimes at more attractive prices and often with lower risks.”
Corvex’s other investments include Illumina Inc., which counts billionaire activist investor Carl Icahn among its investors, and Dollar Tree Inc., which is a target of Mantle Ridge LP.
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