Hedge fund Irenic Capital Management has built a roughly 2% stake in precision technology company Ralliant (RAL.N) and is urging the firm to implement cost reductions, accelerate share buybacks, and focus more on its defense and electronics business, according to a report by Reuters.
The report cites unnamed sources familiar with the matter as highlighting that the New York-based activist has met repeatedly with Ralliant management to discuss ways to enhance the $4.7bn company’s performance. Irenic is advocating for a larger and faster buyback program than the existing $200m authorisation, which the company reaffirmed in early February.
The hedge fund also wants Ralliant to reduce operating expenses after the company surprised investors by increasing its cost forecasts, including merit raises and other employee-related expenses.
Irenic is pressing Ralliant to concentrate on its sensors and safety systems business, which generates approximately 80% of the company’s earnings. The remaining revenue comes from its test and measurement unit, which analysts say has contributed to stock volatility. Since spinning out of Fortive (FTV.N) less than a year ago, Ralliant’s shares have dropped 20.5%, with a roughly 30% plunge in early February following elevated cost guidance.
The activist fund believes the two Ralliant businesses are not well-aligned and has privately suggested that the test and measurement unit could be better positioned with a competitor, such as Emerson Electric (EMR.N). Meanwhile, Irenic sees growth potential in the sensors and safety systems segment, citing U.S. electrical grid modernisation and missile defense initiatives as long-term tailwinds.
Irenic, co-founded by Adam Katz and Andy Dodge, has a track record of pushing portfolio companies to streamline operations or split into more focused businesses. For example, the fund previously encouraged Barnes Group to pursue changes that culminated in a sale to Apollo in early 2025.
Ralliant has not commented on Irenic’s proposals.
