Datascope Corporation (NDAQ: DSCP) is no stranger to activist pressure after a large hedge fund won representation on its board last year. The board seat is now paying off as the medical devices company recently took action to sell off one of its key divisions and return the proceeds to shareholders. The move should help boost the firm's share price, which has been trading within a narrow range before breaking out late last week on the news.

Earlier this month, Datascope agreed to sell its patient-monitoring business to China's Mindraw Medical for $240 million in cash. The company also announced its intent to return the proceeds to shareholders in the form of a share buyback, special dividend, or combination to be determined when the transaction closes. These actions are designed to unlock value by encouraging investors to assign a fair multiple to the company's stock.

The move drew widespread support from shareholders, including 6.7% owner Ramius Capital. The activist hedge fund noted in a Schedule 13D filing with the SEC that the deal "provides for significant value for the patient monitoring business" and represents "the best interest of all shareholders". The activist also "expects that management and the board of directors will continue to explore opportunities to maximize value for all shareholders".

The last statement is of particular interest given Ramius' board presence. Shareholders can expect the activist hedge fund to continue working to unlock value in the company. The regulatory filing also revealed that the hedge fund and its partners remain net buyers of the stock, so investors can be sure that their interests are aligned. In the end, these factors make DSCP a stock worth watching!

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