Nautilus, Inc. (NYSE:NLS) shares spiked today after an activist hedge fund won control over the Washington-based company’s board in a proxy contest. New York-based Sherborne Investors announced that it won four seats on the company’s seven-member board, which gives them the majority control that they need to enforce change.

“We appreciate the support of our fellow shareholders and look forward to working with the new board and management to implement an effective strategy at Nautilus to return it to profitability and establish a platform for future growth,” said Bramson in a statement.

The new board will include Sherborne managing partner Edward Bramson as Chairman as well as Gerard Eastman, Michael Stein and Richard Horn. These directors will join incumbent directors Robert Falcone, Ronald Badie and Marvin Siegert.

“I look forward to working with our newly reconstituted Board of Directors,” said Bob Falcone. “I believe very strongly in the future of this Company and am committed to implementing the necessary actions to restore it to sustainable growth.”

Nautilus also announced that it signed a commitment letter with the Bank of America to replace its current debt facility with an underwriten 5-year, $100 million asset-backed loan with an accordion feature to increase to $125 million. The loan, expected to close January 14th, will provide the company with the working capital that they need to undergo the changes sought by the activist hedge fund.

In the end, this is all great news for shareholders as change is finally being enforced. Clearly, the new hedge fund board members will be focused on delivering value for shareholders while the existing board will continue to provide valuable advice for the general business. Combined, these factors make NLS a stock worth watching!

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