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Box Inc disclosed private equity giant KKR & Co Inc will lead a $500 million investment in the cloud services provider and get a seat on its board, amid pressure from hedge fund Starboard Value LP.

The investment will be executed through convertible preferred stock and comes weeks after Reuters reported that Box was exploring a sale as shareholder Starboard pressured the company over its stock performance.

Shares of the company fell more than 8% to $22.26, as “there was likely some level of M&A premium baked into the share price,” D.A. Davidson & Co analyst Rishi Jaluria said.

“Over the medium term, I think having KKR as a strategic partner is extremely valuable, but today’s share reaction is a result of the reduced likelihood of a takeout,” said Berenberg analyst Brett Knoblauch.

Box also said current director Bethany Mayer, who joined the board after an agreement with Starboard last April, will replace Chief Executive Officer Aaron Levie as chair, effective May 1.

Demand for Box’s offerings including file sharing, cloud storage and cloud backup services has risen since the onset of COVID-19, driven by companies whose employees are working from home.

While Box has benefited from this trend, it has struggled to fully capitalize on it, as some of its services and products are offered by competitors such as Microsoft Corp either for free or at a lower cost.

“The investment from KKR is a strong vote of confidence in our vision, strategy, and continued efforts to increase growth and profitability,” said Levie.

A self-tender for the buyback, whose pricing and amount of shares has not yet been decided, will begin after Box releases its first-quarter results in May this year.

After the investment, which is expected to close in May, KKR’s Head of Americas Technology Private Equity John Park will join Box’s board, making him its tenth member.

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