Robert Burton has 30 years of experience in printing, so it’s not unusual that late last week he landed the top job at Cenveo Inc., the Douglas County envelope and commercial printing giant.
It’s how he got the job that surprised some veteran financial observers.
Burton, 62, head of Burton Capital Management of Greenwich, Conn., amassed 11.2 percent of Cenveo stock, then launched a successful proxy battle to pressure the company to oust the board and appoint him chief executive.
After months of resistance, during which Burton challenged Cenveo’s business strategy and criticized the CEO’s lack of experience, Cenveo caved. It handed the chairmanship and CEO job to Burton, who also is reshaping the board with several handpicked lieutenants.
Corporate takeover experts said Burton’s path to the executive suite was fairly unusual, considering he owned a comparatively small slice of Cenveo.
“For someone with that amount of stock holdings, it is fairly rare,” said Paul Hodgson, a senior researcher at The Corporate Library, a watchdog group in Portland, Maine.
In most proxy fights, Hodgson said, a single investor needs to own at least 20 percent of a company’s stock to effectively influence change on the board or in upper management.
But when Cenveo in June replaced longtime CEO Paul Reilly with James Malone, a Florida corporate restructuring specialist, it likely weakened the company’s entrenched management.
That made it more difficult for Cenveo to fend of Burton’s charge, Hodgson said. Cenveo “probably thought (Burton) was its best option.”
Even so, Burton was – and is – Cenveo’s largest investor.
That likely helped Burton rally support from other stockholders who recognized his substantial investment, said Sanjai Bhagat, a professor of finance at the University of Colorado.
“It shows (Burton) has a serious interest and will probably make some good investment decisions,” Bhagat said.
The agreement, Bhagat said, “doesn’t sound too out of the ordinary.”
For Burton, who could not be reached for comment following the announcement, such a bold approach isn’t new.
In 2004, he tried to use a 6 percent stake in Creo Inc., a Canadian-based digital printing company, to oust the board and its chief executive, Amos Michelson.
The bid faltered, however, when film and photo giant Eastman Kodak Co. purchased Creo for $980 million in January.
Burton said the takeover deal would benefit Cenveo, its stockholders and its 9,000 workers, 500 of whom are based at four sites in Colorado. With $1.78 billion in annual sales, Cenveo, formerly Mail-Well, is nearly twice as large as Denver luggage giant Samsonite Corp.
“I appreciate the willingness of the Cenveo board of directors to enter into this agreement and facilitate an orderly resolution to the proxy contest,” Burton said in a statement.
Cenveo’s stock price closed Friday up 32 cents to 9.95.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
