Sources report that Activist Engine Capital has appointed six directors to software company Dye & Durham.

• Dye & Durham's board will have six new director candidates nominated by Engine Capital, an activist investor.
• The company's sale process had begun before the launch of the engine's campaign.
• Engine believes that Dye & Durham's undervaluation and leveraged balance sheet would lead to an undervaluation if the company were sold, while Dye & Durham characterizes Engine's actions as an attempt to seize control of the company.

Engine Capital, an activist investor, has nominated a slate of directors at Canadian legal software maker after the company received takeover interest and initiated a sale process, which Engine characterized as "reactionary."

According to sources, Engine, with a 7% stake in the company, intends to propose six nominees for the board, including founder Arnaud Ajdler, executive Ritu Khanna, and former LexisNexis CEO Hans Gieskes.

The people said that Engine is planning to install a new management team and reduce DND's leverage if it gains control of the company's board. In September, Engine had already signaled its intention to launch a proxy fight at the company. Dye & Durham's annual meeting is scheduled for December 17.

The special meeting at the company, initially called for by Engine, was delayed twice to December. At the time, the activist sought only three seats on the board, according to one source.

Dye & Durham, a software company for law firms, has over 60,000 customers worldwide. Engine, an activist investor, believes that selling the company at this time would undervalue it. The investor has also campaigned at consulting firm, freelance marketplace, and energy company.

In October, DND announced that it had received takeover interest and was working with its bankers at Goldman Sachs to conduct a strategic review and sale process. Engine has criticized CEO Matthew Proud's M&A strategy as "dubious." The company had already initiated a strategic review in November 2023 and has started selling off non-core businesses.

Both strategic and financial buyers are interested in Engine, according to Bloomberg. DND has stated that Engine's campaign is aimed at gaining control and that it is operating under the assumption that it will remain a standalone company.

Representatives for the company did not immediately return a request for comment.