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The fight over the future of one of Buffalo’s biggest technology companies is getting hotter.

The three-week-old battle intensified Tuesday when the dissident shareholders who want Synacor put up for sale called for the resignation of Chairman Jordan A. Levy. They are also seeking two seats on the company’s board of directors.

In response, Synacor put a plan in place that would make it much more expensive for the company to be acquired unless the deal was negotiated with its board.

And the company questioned the motives of one of its dissident shareholders, K. Peter Heiland, noting that he is interim CEO of a competitor, Piksel, that could be a potential acquirer of Synacor.

At stake is the future of one of Buffalo’s biggest technology companies, a homegrown business whose waterfront office is home to about 350 workers, making it and fellow Buffalo information technology firm Computer Task Group two of the pillars of the Buffalo Niagara region’s undersized information technology sector.

At the center of the fight is Synacor’s sagging financial performance, which has caused its stock to lose half its value since the company first went public in February 2012.

“The stock’s been a disappointment to everyone,” said Allen F. “Pete” Grum, president of Rand Capital Corp., a Buffalo venture capital firm that was one of Synacor’s earliest investors and still owns 2 percent of the company, which is losing money as its sales fall. “It’s not what we thought we were getting into.”

But there also is no agreement among investors and company management over the best way to make the business profitable again.

Synacor’s management has said it is excited about the company’s plan to develop new products that will let consumers access the Internet content that it produces for its clients in new ways.

“I think the cure is enhanced performance by the company,” Grum said.

But the dissident shareholders said they have no confidence in that strategy or the ability of the firm’s current leadership to stem its current losses or reverse its declining sales. A better – and faster – way to give shareholders a better return on their investment in Synacor would be to sell the company to a buyer willing to pay significantly more than its current share price of $2.50 per share, which is half of its $5 initial public offering price.

Analyst Richard R. Tullo, who follows Synacor for investment firm Albert Fried & Co., said he leans toward selling the company, noting the frustration among investors that management’s efforts to rebuild revenues by launching new products and services have taken far longer than anticipated, with only modest results so far.

“They’re not moving, at this point in time, to turn around the company and make it better,” Tullo said.

That’s the point that Synacor’s disgruntled shareholders – investment firms JEC Capital Partners and Ratio Capital Management – raised again in their latest letter to the company’s board of directors.

“Immediate board change is needed,” the investors wrote. “There is no possible justification for giving yourselves more time to work on your stated goal of ‘maximizing long-term value.’ Many other shareholders feel the same.”

JEC Capital, a Randolph, Mass., investment firm, has taken an activist role at other companies, including Piksel and Ithaca Energy. Ratio Capital is an investment firm based in the Netherlands.

Synacor fired back by adopting a stockholder rights plan, which would kick into effect if an investor or a group of affiliated shareholders acquired a stake of 10 percent or more in the company. While Synacor said the rights plan is not aimed at preventing a takeover or sale of the firm, it would make a takeover much more expensive unless it were negotiated with the company’s board.

“The rights plan is designed to protect the interests of all our shareholders,” Levy said in a statement. “In order to guard against potential attempts to seize control of the company without paying an appropriate premium, we are taking this action today.”

Heiland, managing director of the dissident investment firm JEC Capital Partners and the interim CEO of Piksel, has “the capability to become a potential acquirer, and as such, may have motives that are not aligned with other shareholders,” Levy said. “We have concerns regarding the motivations and actions of JEC Capital Partners.”

The dissident shareholders, who own a combined stake of 9.8 percent in Synacor, repeated their demand that the company put itself up for sale. The shareholders also want the company to stop its search of a new CEO to replace the retiring Ronald N. Frankel, a Los Angeles-based executive who plans to keep running the company until a successor is found.

The shareholders singled out Levy, the Buffalo venture capitalist who has been a member of Synacor’s board since 2001, for the harshest criticism. “We believe that the heart of the problem with the current board is its chairman, Jordan Levy,” the shareholders wrote.

The investors criticized Levy for his role in approving an “above-market” severance agreement with Frankel and providing board members with cash payments and stock options as compensation for their service that are “unjustified by the performance of the company.”

They also criticized Levy for “consistently rewarding long-standing and ineffective directors (Mr. Levy included) by nominating them for re-election.”

Behind the fight over Synacor’s future is the company’s current financial struggles.

Synacor lost $1.4 million last year as its revenues slid by 8 percent after a change by Microsoft in its Windows 8 operating system relegated the start pages that Synacor operates for its customers to a secondary screen that requires additional clicks for users to access. That led to an 8 percent drop in Synacor’s sales, which totaled $112 million last year, with expectations that sales will decline by an additional 11 percent this year, to $100 million.

email: drobinson@buffnews.com