Activist investor takes aim at Telkonet

Kross calls for potential sale of company

Telkonet HQ
The Telkonet headquarters in Waukesha.

Waukesha-based Internet of Things product developer Telkonet Inc. is the latest Milwaukee area company to be targeted by an unhappy activist investor.

Last week, Telkonet shareholder Peter Kross filed a notice with the SEC that he plans to nominate his own directors to Telkonet’s board at the company’s upcoming shareholder meeting.

Telkonet HQ
The Telkonet headquarters in Waukesha.

Kross, who holds 2.9 percent of the company’s shares, is the founder and general partner of activist investment firm LaSalle Financial Partners LP. He hopes his nominees would maximize shareholder value, potentially by selling the company.

“I am concerned about the stock performance of the company,” Kross said in his filing. “The time has come to ensure that the board focuses on maximizing shareholder value.”

“The company has rebuffed my offer to serve on the board of directors,” he said. “As one of the largest owners of the company, I believe the time has come for the company to consider all strategic alternatives to maximize shareholder value, including the possible sale of the company.

In November, Telkonet named F. John Stark III its new CFO, succeeding Gene Mushrush.

Telkonet’s EcoSmart home automation platform helps optimize energy efficiency. The company reported third quarter net income of $269,420, or 0 cents per share, down from $346,584, or 0 cents per share, in the fourth quarter of 2014. Its third quarter revenue totaled $4.1 million, which was flat year-over-year.

Brown Deer-based Bank Mutual Corp. was also recently a target of an activist investor, and worked to come to an agreement with that investor. And executives and analysts of several other local companies, including Kohl’s Corp. and Johnson Controls Inc., have been on the lookout recently for disruption by activist investors.

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Molly Dill, former BizTimes Milwaukee managing editor.

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