• Flowers updates director nomination disclsoures
• Kelvion takeover puts Modine margins in focus
• Sweetgreen in focus after new severance plan

Rising shareholder frustration at bakery product company Flowers Foods might have the company worried about an activist.

The Thomasville, Georgia-based company disclosed some bylaw changes in an 8-K out after the close on Friday. The changes include clarifying some disclosure requirements in connection with director nominations.

Flowers Foods jumped on the radar last fall thanks to some enhanced change-in-control payouts. Things became a little more interesting back in June following the abrupt resignation of independent presiding director Thomas Chubb.

While there weren’t any unusual buyers in the latest round of 13F filings, shareholders are beginning to get restless. Votes for chairman and CEO Ryals McMullian fell to 82% at this year’s AGM from roughly 97% the year before.

Shares of the company have been sliced in half over the past year, and the stock has lost 70% over the past five years.

Given the situation, we wonder if the bylaw tweaks were a proactive measure to get ahead of a potential activist. Aside from operational changes, an activist could also push for a sale amid a currently healthy backdrop for M&A in the space.

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SLB announced the takeover of data-center cooling business Kelvion from Apollo this morning in a USD 4.1bn deal. This could prove to be an interesting yardstick by which to evaluate a similar data-center business that Modine Manufacturing recently separated out.

The Kelvion sale works out to 11x expected 2026 adjusted EBITDA. The release notes that the data center business specifically is expected to bring in about USD 1.25bn in revenues for the year. That gives us about USD 200m in adjusted EBITDA for the data center segment, assuming it runs at a similar 16% adjusted EBITDA margin.

Modine is also making a big bet on data-center cooling. The industrial company announced back in January that it would spin off its performance technology (PT) business in a Reverse Morris Trust transaction, merging the segment with Gentherm and allowing it to focus more on its own higher growth data-center cooling business.

That data-center business was broken out for the first time this past quarter, showing USD 51.6m in adjusted EBITDA, working out to about 40% of the total adjusted EBITDA for the quarter. The adjusted EBITDA margin for that business came just under 15% for the quarter and below our assumption for Kelvion’s sale. The company expects margins to hit 19% for the next quarter driven by increased volume and up to 20% for the second half of the year — significantly higher than where 1Q came in.

Modine itself is trading at about 14x expected adjusted EBITDA for the year, three turns higher than what SLB just paid for Kelvion. It is worth noting that its new data center segment is now without a lead. Art Laslzo was running the business as of April, but stepped down last month for “unexpected personal reasons.”

That will leave us watching Modine closely to see how its data center business fares in the upcoming quarters, especially with an 11x peg now established, and with Modine posting significantly lower margins than what it’s forecasting for the rest of the year.

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Restaurant chain Sweetgreen has adopted a new severance plan as the stock price continues to struggle.

The quick serve restaurant disclosed the plan in an 8-K, revealing that four executives will be covered. The filing details benefits that the executives are entitled to, including termination in relation to a change in control.

The plan comes at an interesting time for the company. Shares have had a rough time in the public markets, closing Friday at USD 6.97, or 75% below its 2021 IPO price of USD 28. Growth has been difficult, with FY25 sales coming in essentially flat compared to FY24.

CEO Jonathan Neman detailed his “sweet growth transformation plan” back in February. Despite some underwhelming results, Neman said earlier this month that progress seen in the quarter “reinforces our confidence that the plan is working.”

Given Sweetgreen’s difficult time in the public markets, we wonder if the turnaround could be easier accomplished privately. Several companies in the space, like Wendy’s and Papa John’s, have seen recent private equity interest.

It’s unclear what sparked the decision to adopt the severance plan now, but with shares getting battered amid M&A activity in the space, we’ll be keeping a closer eye on Sweetgreen.