ValueFind: InFocus Corp.

One of the largest hedge funds in the world has decided to go “dumpster diving” with an unlikely microcap play.

Wilsonville, Ore.-based digital projector company InFocus Corp. (Nasdaq: INFS) hasn’t turned a profit since fiscal 2004, but this hasn’t stopped hedge fund manager Caxton Associates, with $12 billion in assets under management, from trying to unlock value at the $97 million market cap company. Caxton first emerged as a 5% shareholder in InFocus last October and began demanding board representation. In February, a settlement agreement was announced, which resulted in two Caxton designees joining the InFocus board of directors.

Only a month after Marren and Abouchar officially joined the board in mid-April, InFocus announced the resignation of company CEO and President Kyle Ranson. While Ranson inherited a difficult situation when he took the helm in September 2004, under his leadership, InFocus shares declined 70%, while the Nasdaq increased over 35% in value. InFocus’ Vice President of Global Operations was named acting COO and the company’s board has begun a search for a successor CEO. InFocus is also continuing a review of its strategic alternatives, which it began last October with Bank of America.

Caxton, which now holds an 11% stake in InFocus, tightened its grip on the struggling company further with the announcement earlier this month of two more Caxton designees to InFocus’ board. InFocus has agreed to hold its 2007 annual meeting on July 31 after which the newly constituted board will have four Caxton representatives and two current directors who are not Caxton designees. A board seat will also be awarded to the new CEO if one is hired prior to the meeting. Essentially, Caxton Managing Director Ross Taylor has gained voting control of the company without actually holding a proxy contest.

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