Cloud storage giant Box Inc. is in talks with multiple companies and private equity firms about a potential sale, Reuters reported today.

The discussions come as Box reportedly faces investor pressure over its stock performance. The company’s shares are trading at about $23.50 apiece, only slightly higher than where they closed on the day of its initial public offering five years ago. That’s despite the fact that Box’s annual revenue has more than doubled since, from $303 million in fiscal 2016 to $770.8 million in fiscal 2021.

The pressure to explore a potential sale is reportedly coming from activist investor Starboard Value LP, which previously played a role in eBay’s sale of its classifieds ads business. Reuters reported last month that Starboard is also asking Box to take unspecified “additional steps” to boost shareholder value. The firm was said to be considering nominating candidates for three of the seats on Box’s board, including the one held by Chief Executive Aaron Levie, if the company doesn’t make sufficient progress.

Starboard also floated the idea of nominating new candidates to the board last year. It eventually decided not to go ahead with the move after Box agreed to appoint three independent directors. 

Box could fetch a sizable premium in any potential sale given its steady revenue growth. The company closed its most recent quarter with sales of $198.9 million, above the $196.5 million analysts were looking for, and beat the consensus earnings per share estimate as well.

Box has grown its top line partly by building new value-added tools for enterprises atop its core file sharing platform. Thanks to those tools, organizations can use Box not only to store their documents but also to sort them based on sensitivity, set up security controls to limit unauthorized access and create automation workflows for common tasks such as requesting document approvals. 

External product integrations are another central pillar of the company’s product roadmap. Box provides connectors that enable users of Salesforce and other popular cloud platforms to access files they store in its service without opening a new tab. Speaking about the company’s user strategy, Levie stated last year that Box is aiming to turn its platform into the “single source of truth for their content across their IT stack.”

The sources who spoke to Reuters for today’s report didn’t name any of the firms with which Box is said to have held sale discussions.

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