DMC Global Rejects Non-Binding Proposal from Steel Connect
DMC Global (NASDAQ: BOOM) has rejected a non-binding proposal from Steel Connect to acquire outstanding shares at $10.18 per share in cash. The board determined the proposal undervalues DMC's business and future potential, citing several key factors:
The proposal fails to account for Arcadia's turnaround potential under returning president Jim Schladen and its position to participate in Southern California wildfire reconstruction. It also doesn't reflect DynaEnergetics' improvements, including automated manufacturing and value engineering initiatives set to benefit in 2025.
The company announced that Q4 sales and adjusted EBITDA are expected to exceed the high end of guidance. DMC has successfully negotiated an extension of its Arcadia joint venture 'put option' obligations until September 2026, providing flexibility for debt reduction and refinancing. A CEO search is currently underway with assistance from an executive search firm.
DMC Global (NASDAQ: BOOM) ha rifiutato una proposta non vincolante di Steel Connect per acquisire le azioni in circolazione a $10,18 per azione in contante. Il consiglio ha determinato che la proposta sottovaluta il business e il potenziale futuro di DMC, citando diversi fattori chiave:
La proposta non tiene conto del potenziale di rilancio di Arcadia sotto la presidenza di Jim Schladen e della sua posizione per partecipare alla ricostruzione dopo gli incendi in California meridionale. Non riflette neppure i miglioramenti di DynaEnergetics, comprese le iniziative di produzione automatizzata e ingegneria del valore che beneficeranno nel 2025.
La società ha annunciato che le vendite del Q4 e l'EBITDA rettificato dovrebbero superare il limite superiore delle previsioni. DMC ha negoziato con successo un'estensione delle obbligazioni di 'put option' della joint venture Arcadia fino a settembre 2026, offrendo flessibilità per la riduzione del debito e il rifinanziamento. Attualmente è in corso una ricerca per un CEO con l'assistenza di una società di ricerca esecutiva.
DMC Global (NASDAQ: BOOM) ha rechazado una propuesta no vinculante de Steel Connect para adquirir acciones en circulación a $10.18 por acción en efectivo. La junta determinó que la propuesta subestima el negocio y el potencial futuro de DMC, citando varios factores clave:
La propuesta no toma en cuenta el potencial de recuperación de Arcadia bajo la presidencia de Jim Schladen y su posición para participar en la reconstrucción tras los incendios forestales en el sur de California. Tampoco refleja las mejoras de DynaEnergetics, incluidas las iniciativas de fabricación automatizada e ingeniería de valor que se espera beneficien en 2025.
La compañía anunció que se espera que las ventas del Q4 y el EBITDA ajustado superen el límite superior de las proyecciones. DMC ha negociado con éxito una extensión de sus obligaciones de 'put option' de la joint venture Arcadia hasta septiembre de 2026, proporcionando flexibilidad para la reducción de deudas y el refinanciamiento. Actualmente se está llevando a cabo una búsqueda de CEO con la ayuda de una firma de búsqueda ejecutiva.
DMC 글로벌 (NASDAQ: BOOM)은 Steel Connect의 비구속 제안을 거부했습니다. 주당 $10.18에 유통 주식을 인수하겠다는 제안이었습니다. 이사회는 이 제안이 DMC의 사업과 미래 잠재력을 과소평가하고 있다고 판단하며, 몇 가지 주요 요인을 언급했습니다:
이 제안은 Jim Schladen 회장이 복귀한 후 Arcadia의 회복 가능성을 고려하지 않고 있으며, 남부 캘리포니아 산불 복구에 참여할 수 있는 위치를 반영하지 않습니다. 또한 2025년에 혜택을 볼 자동화 제조 및 가치 공학 이니셔티브를 포함한 DynaEnergetics의 개선 사항도 반영하지 않고 있습니다.
회사는 Q4 매출 및 조정 EBITDA가 가이던스의 상단을 초과할 것으로 예상된다고 발표했습니다. DMC는 Arcadia 합작 투자 '풋 옵션' 의무의 연장을 2026년 9월까지 성공적으로 협상하여 부채 축소 및 재융자를 위한 유연성을 제공했습니다. 현재 CEO 검색이 진행 중이며, 경영진 검색 회사의 도움을 받고 있습니다.
DMC Global (NASDAQ: BOOM) a rejeté une proposition non contraignante de Steel Connect pour acquérir des actions en circulation à 10,18 $ par action en espèces. Le conseil a déterminé que la proposition sous-estime l'activité et le potentiel futur de DMC, citant plusieurs facteurs clés :
La proposition ne prend pas en compte le potentiel de redressement d'Arcadia sous la présidence de Jim Schladen et sa position pour participer à la reconstruction après les incendies de forêt en Californie du Sud. Elle ne reflète pas non plus les améliorations de DynaEnergetics, y compris les initiatives de fabrication automatisée et d'ingénierie de la valeur qui devraient bénéficier en 2025.
L'entreprise a annoncé que les ventes du Q4 et l'EBITDA ajusté devraient dépasser le haut de la fourchette de prévisions. DMC a réussi à négocier une prolongation de ses obligations de 'put option' de la coentreprise Arcadia jusqu'en septembre 2026, offrant ainsi une flexibilité pour la réduction de la dette et le refinancement. Une recherche de PDG est actuellement en cours avec l'aide d'une société de recherche exécutive.
DMC Global (NASDAQ: BOOM) hat ein unverbindliches Angebot von Steel Connect abgelehnt, um ausstehende Aktien zum Preis von 10,18 $ pro Aktie in bar zu erwerben. Der Vorstand stellte fest, dass das Angebot das Geschäft und das zukünftige Potenzial von DMC unterbewertet und nannte mehrere wichtige Faktoren:
Das Angebot berücksichtigt nicht das Turnaround-Potenzial von Arcadia unter dem zurückkehrenden Präsidenten Jim Schladen und die Möglichkeit, an der Wiederherstellung nach den Waldbränden in Südkalifornien teilzunehmen. Es spiegelt auch nicht die Verbesserungen von DynaEnergetics wider, einschließlich automatisierter Fertigung und wertschöpfender Initiativen, die 2025 von Vorteil sein sollen.
Das Unternehmen gab bekannt, dass die Q4-Umsätze und das bereinigte EBITDA voraussichtlich die obere Grenze der Prognose übersteigen werden. DMC hat erfolgreich eine Verlängerung der 'Put-Option'-Verpflichtungen des Arcadia-Joint Ventures bis September 2026 verhandelt, was Flexibilität für Schuldenabbau und Refinanzierung bietet. Derzeit läuft eine Suche nach einem CEO mit Unterstützung einer Personalvermittlungsfirma.
- Q4 sales and adjusted EBITDA expected to exceed high end of guidance
- Successfully extended Arcadia joint venture obligations until September 2026
- Manufacturing automation improvements to deliver cost benefits in H1 2025
- Completed value engineering initiative for DynaStage system
- Currently operating without permanent CEO
- Facing cyclical downturns in energy industry affecting DynaEnergetics
- Dealing with debt obligations requiring future refinancing
Insights
The rejection of Steel Connect's
The automation initiatives at DynaEnergetics' North American manufacturing center, scheduled to yield benefits in H1 2025, represent a strategic transformation that could significantly enhance operating margins. The value engineering of the DynaStage system positions the company to capture higher margins in an improving energy market environment.
The negotiated extension of the Arcadia joint venture put option to September 2026 is particularly strategic, as it provides important financial flexibility during a period of operational transformation. This extension effectively removes near-term refinancing pressure and allows management to focus on executing their turnaround strategy.
Steel Connect's declining offer pattern - from
The timing of Jim Schladen's return to lead Arcadia is particularly significant, as it coincides with potential opportunities in Southern California's reconstruction efforts following recent wildfires. This market opportunity, combined with the operational improvements at DynaEnergetics, creates multiple vectors for value creation that aren't captured in Steel Connect's offer.
Steel Connect proposal undervalues DMC and denies stockholders participation in the Company’s emerging value creation opportunity
Fourth quarter sales and adjusted EBITDA expected to exceed high end of guidance range and demonstrate stabilization of the Company
BROOMFIELD, Colo., Feb. 12, 2025 (GLOBE NEWSWIRE) -- DMC Global Inc. (Nasdaq: BOOM) (“DMC” or the “Company”) today rejected a non-binding proposal from Steel Connect to acquire all of the outstanding shares of common stock of the Company, not already owned by Steel Connect, for
DMC’s board of directors (the “Board”) considered the Proposal in consultation with its legal and financial advisors and in accordance with its fiduciary duties. After considerable review and deliberation, the Board determined the Proposal undervalues DMC’s business and its potential to drive future risk-adjusted value for all stockholders.
The reasons for the Board’s rejection of the non-binding Proposal include the following:
- The Steel Connect Proposal fails to compensate stockholders for the turnaround at Arcadia and its long-term value creation potential. DMC recently recruited back Arcadia’s former president, Jim Schladen, to lead the business. With Mr. Schladen’s return, Arcadia has refocused on its core commercial operations while stabilizing and developing an improvement plan for its high-end residential products. As a regional architectural building products leader based in the Los Angeles metro area, Arcadia is uniquely positioned to participate in the long-term reconstruction of many neighborhoods destroyed by the recent wildfires in Southern California.
- The Steel Connect Proposal fails to compensate stockholders for any cyclical improvement at DynaEnergetics and proactive steps taken during 2024 to strengthen the business. DynaEnergetics, the world’s leading supplier of factory-assembled well-perforating systems, is subject to cyclical downturns in the energy industry, which can temporarily overshadow otherwise strong operating fundamentals. Over the past several months, DynaEnergetics has made significant progress automating its North American manufacturing center, with cost benefits that will be largely realized in the first half of 2025. DynaEnergetics also has completed a substantial value engineering initiative for its flagship DynaStage system. These improvements will be particularly valuable in North America’s unconventional oil and gas industry, which favors technology leaders and is expected to benefit from an improved economic setting and more energy-friendly regulatory environment.
- The Board believes Steel Connect has repeatedly attempted to advance its interests over those of DMC’s stockholders. Steel Connect has proposed an investment in DMC to fund its obligations under its Arcadia joint venture in exchange for shares of an identical preferred stock instrument and substantial representation on the Board. The Board determined that the terms proposed would destroy value for DMC stockholders and enable Steel Connect to gain effective control of DMC without paying an appropriate premium while diluting DMC’s stockholders. Rather than accepting Steel Connect’s terms, DMC successfully negotiated an extension of its obligations in respect of the “put option” under the Arcadia joint venture until no earlier than September 6, 2026, providing the Company with significant optionality to reduce debt for the benefit of all existing stockholders and refinance on potentially more favorable terms at the appropriate time.
- DMC’s business is stabilizing, CEO search efforts are underway, and DMC’s value creation path is becoming clear. The Company expects fourth quarter sales and adjusted EBITDA to exceed the high end of its guidance range. The Board, with the assistance of a recognized executive search firm, commenced a process to recruit a new CEO for the long term. The Proposal undervalues DMC and its future value creation prospects. The Proposal would capture the upside of the important initiatives in progress or recently completed, that is due to all of the Company’s stockholders.
- From the time of its initial proposal to acquire the Company for
$16.50 per share, to the delivery of its latest proposal for$10.18 per share, Steel Connect has repeatedly demonstrated it is not serious about engaging in good faith with DMC. Despite the Company’s efforts to engage with Steel Connect, it has never submitted an actionable proposal to the Board. Steel Connect has received an extraordinary level of access and opportunity to conduct due diligence on DMC. Steel Connect’s claims to the contrary are factually inaccurate.
Stockholders are not required to take any action at this time.
Advisors
BofA Securities is acting as financial advisor to DMC. Womble Bond Dickinson (US) LLP and Richards, Layton & Finger, P.A. are acting as DMC’s legal advisors, Sodali & Co. is acting as its strategic stockholder advisor, and Gagnier Communications LLC is its strategic communications advisor.
About DMC Global
DMC Global is an owner and operator of innovative, asset-light manufacturing businesses that provide unique, highly engineered products and differentiated solutions. DMC’s businesses have established leadership positions in their respective markets and consist of: Arcadia, a leading supplier of architectural building products; DynaEnergetics, which serves the global energy industry; and NobelClad, which addresses the global industrial infrastructure and transportation sectors. Based in Broomfield, Colorado, DMC trades on Nasdaq under the symbol “BOOM.” For more information, visit: HTTP://WWW.DMCGLOBAL.COM.
Safe Harbor Language
This news release contains certain forward-looking statements regarding the Company, including the expectation that fourth quarter sales and adjusted EBITDA will exceed the Company’s prior guidance range, the potential benefits of Arcadia’s improvement initiatives and its opportunities to participate in reconstruction efforts following the recent fires in Los Angeles, the cost benefits of DynaEnergetics’ automation and product redesign initiatives, and the potential benefits of a more energy-friendly regulatory environment. All of these statements are based on management’s expectations as well as estimates and assumptions prepared by management that, although they believe to be reasonable, are inherently uncertain. These statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and other factors outside of the Company’s control that may cause its business, industry, strategy, financing activities or actual results to differ materially. More information on potential factors that could affect the Company and its financial results is available in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections within the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and in other documents that the Company has filed with, or furnished to, the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to release public revisions to any forward-looking statement, including, without limitation, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
CONTACT:
Investors:
Geoff High
Vice President of Investor Relations
303-604-3924
Media:
Riyaz Lalani or Dan Gagnier
Gagnier Communications
416-305-1459
DMCGLOBAL@GAGNIERFC.COM
FAQ
Why did DMC Global (BOOM) reject Steel Connect's acquisition offer?
What is DMC Global's (BOOM) Q4 2024 financial performance outlook?
What major operational improvements has DMC Global (BOOM) implemented in 2024?
When does DMC Global's (BOOM) Arcadia joint venture put option expire?
