KKR & Co. is leading a $500 million investment in Box Inc. in a deal that will see one of its representatives join the board of the cloud software company.

The private equity firm said on Thursday it will receive preferred convertible stock in Box as a result of the transaction, according to a statement that confirmed a Bloomberg News report.

While Aaron Levie will continue as Box’s chief executive officer after the deal but will step down as chairman, Box said. He will remain on the board.

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

Technology executive Bethany Mayer will take Levie’s place as chairman. Mayer, who is also a director at Sempra Energy and Marvell Technology Group Ltd., joined the board last year as part of a settlement with activist Starboard Value.

“I believe we have the right strategy and right team in place to further cement our leadership position in the market by driving growth, operational efficiency, and shareholder value,” Mayer said.

KKR’s John Park, who heads Americas technology private equity at the firm, will separately join the board, which will be expanded to 10 directors.

End of Review

The proceeds from the investment will be used to fund share buybacks. The agreement with KKR also marks the conclusion of Box’s strategic review.

The company’s shares, which have climbed 60% over the past year, closed at $24.27 on Wednesday for a market value of $3.9 billion. Shares were down 5.3% in early trading Thursday on the news.

Levie, 36, co-founded Box in 2005 from his University of Southern California dorm room and took the company public a decade later. He’s been chairman and CEO of the Redwood City, California, company since it began.

Activist investor Starboard took a stake in Box in 2019, saying the company had underperformed its peers and could be an attractive takeover target. The firm, led by Jeff Smith, owns almost 8% of Box, according to data compiled by Bloomberg. A representative wasn’t immediately available for comment.

Morgan Stanley, Wilson Sonsini Goodrich & Rosati PC and Sidley Austin LLP advised Box.