Ducommun Incorporated Rejects Unsolicited Revised, Non-Binding Indication of Interest from Albion River
Ducommun Incorporated (NYSE: DCO) has rejected an unsolicited revised, non-binding offer from Albion River to acquire all outstanding shares at $65.00 per share in cash. The Board unanimously determined this proposal undervalues Ducommun's growth initiatives and doesn't reflect the company's strong performance record.
Ducommun's Board remains focused on its Vision 2027 Strategy, which aims to achieve $950M to $1,000M in net revenues by 2027 (a 33-40% increase since 2022), with 18% adjusted EBITDA margins and 13% adjusted operating income margins. The company has already shown significant growth, with revenue increasing from $551M in 2016 to a record $767M in LTM Q1 2024, and EBITDA margins expanding from 10.1% to 14.4% in the same period.
Ducommun Incorporated (NYSE: DCO) ha rifiutato un'offerta non vincolante e rivista da Albion River per acquisire tutte le azioni in circolazione a 65,00 dollari per azione in contante. Il Consiglio di Amministrazione ha determinato all'unanimità che questa proposta sottovaluta le iniziative di crescita di Ducommun e non riflette i solidi risultati di performance dell'azienda.
Il Consiglio di Ducommun rimane concentrato sulla sua Vision 2027 Strategy, che mira a raggiungere ricavi netti tra 950 milioni e 1 miliardo di dollari entro il 2027 (un aumento del 33-40% rispetto al 2022), con margini EBITDA rettificati del 18% e margini di reddito operativo rettificato del 13%. L'azienda ha già mostrato una crescita significativa, con ricavi aumentati da 551 milioni nel 2016 a un record di 767 milioni nel Q1 2024 su base LTM, e margini EBITDA che si sono ampliati dal 10,1% al 14,4% nello stesso periodo.
Ducommun Incorporated (NYSE: DCO) ha rechazado una oferta revisada y no vinculante no solicitada de Albion River para adquirir todas las acciones en circulación a 65,00 dólares por acción en efectivo. La Junta determinó unánimemente que esta propuesta subestima las iniciativas de crecimiento de Ducommun y no refleja el sólido historial de rendimiento de la compañía.
La Junta de Ducommun sigue enfocada en su Vision 2027 Strategy, que tiene como objetivo alcanzar entre 950 millones y 1,000 millones de dólares en ingresos netos para 2027 (un aumento del 33-40% desde 2022), con márgenes de EBITDA ajustados del 18% y márgenes de ingresos operativos ajustados del 13%. La compañía ya ha demostrado un crecimiento significativo, con ingresos que aumentaron de 551 millones en 2016 a un récord de 767 millones en el primer trimestre de 2024 (LTM), y márgenes de EBITDA que se expandieron del 10,1% al 14,4% en el mismo período.
Ducommun Incorporated (NYSE: DCO)는 Albion River의 비공식 개정 비구속 제안을 거부했습니다. 이 제안은 모든 유통 주식을 주당 65.00 달러에 현금으로 인수하려는 것입니다. 이사회는 만장일치로 이 제안이 Ducommun의 성장 계획을 저평가하고 있으며, 회사의 뛰어난 성과를 반영하지 않는다고 판단했습니다.
Ducommun의 이사회는 Vision 2027 Strategy에 집중하고 있으며, 이는 2027년까지 순수익 9억 5천만 달러에서 10억 달러를 달성하는 것을 목표로 하고 있습니다(2022년 대비 33-40% 증가), 조정된 EBITDA 마진 18%와 조정된 운영 소득 마진 13%를 유지하고 있습니다. 회사는 이미 2016년 5억 5천1백만 달러의 수익이 2024년 1분기 기준으로 7억6700만 달러로 증가하며 상당한 성장을 보여주었으며, 같은 기간 EBITDA 마진도 10.1%에서 14.4%로 확대되었습니다.
Ducommun Incorporated (NYSE: DCO) a rejeté une offre révisée, non sollicitée et non contraignante de la part d'Albion River visant à acquérir toutes les actions en circulation au prix de 65,00 dollars par action en espèces. Le Conseil d'Administration a déterminé à l'unanimité que cette proposition sous-estime les initiatives de croissance de Ducommun et ne reflète pas les solides performances de l'entreprise.
Le Conseil de Ducommun reste concentré sur sa Vision 2027 Strategy, qui vise à atteindre un chiffre d'affaires net compris entre 950 millions et 1 milliard de dollars d'ici 2027 (une augmentation de 33 à 40 % par rapport à 2022), avec des marges EBITDA ajustées de 18 % et des marges de revenus d'exploitation ajustées de 13 %. L'entreprise a déjà montré une croissance significative, avec des revenus passant de 551 millions en 2016 à un record de 767 millions au premier trimestre 2024 sur une base LTM, et des marges EBITDA s'élargissant de 10,1 % à 14,4 % sur la même période.
Ducommun Incorporated (NYSE: DCO) hat ein unverlangtes, überarbeitetes, nicht verbindliches Angebot von Albion River abgelehnt, alle ausstehenden Aktien zu einem Preis von 65,00 USD pro Aktie in bar zu erwerben. Der Vorstand hat einstimmig festgestellt, dass dieser Vorschlag die Wachstumsmöglichkeiten von Ducommun unterbewertet und die hervorragenden Leistungsbilanz des Unternehmens nicht widerspiegelt.
Der Vorstand von Ducommun konzentriert sich weiterhin auf seine Vision 2027 Strategy, die darauf abzielt, bis 2027 einen Nettoumsatz von 950 Millionen bis 1 Milliarde USD zu erreichen (ein Anstieg von 33-40 % seit 2022), mit 18 % angepassten EBITDA-Margen und 13 % angepassten operativen Gewinnmargen. Das Unternehmen hat bereits signifikantes Wachstum gezeigt, mit einem Umsatzanstieg von 551 Millionen USD im Jahr 2016 auf einen Rekordwert von 767 Millionen USD im LTM Q1 2024, und die EBITDA-Margen sind im gleichen Zeitraum von 10,1 % auf 14,4 % gestiegen.
- Record revenue of $767M in LTM Q1 2024, up from $551M in 2016
- EBITDA margins expanded from 10.1% in 2016 to 14.4% in Q1 2024
- Market capitalization increased from $286M in 2016 to $929M as of July 23, 2024
- Military and space business grew from $278M in 2018 to $421M in 2022
- 28% increase in market capitalization over the past year
- Rejection of acquisition offer may disappoint some shareholders seeking immediate returns
- Vision 2027 Strategy goals are projections and not guaranteed
Insights
Ducommun's rejection of Albion River's revised offer at
The company's financial performance has been impressive, with revenue growing from
Ducommun's Vision 2027 Strategy targets ambitious growth, projecting revenues of
Given these projections and the company's track record of navigating challenges like the COVID-19 pandemic and the 737MAX issues, the board's decision to reject the offer appears justified. The market seems to agree, with Ducommun's market capitalization increasing by
Ducommun's rejection of Albion River's offer reveals a broader trend in the aerospace and defense industry: the increasing value placed on companies with diversified portfolios and strong aftermarket presence. Ducommun's strategic shift towards engineered products with high aftermarket mix positions it well in this evolving landscape.
The company's growth in the military and space sector, from
Ducommun's focus on high-growth segments of the defense budget and expanding content on key commercial aerospace platforms aligns with industry trends. The ongoing recovery in aircraft production rates is likely to benefit Ducommun significantly, given its strategic positioning.
The board's confidence in rejecting the offer suggests they believe the market is undervaluing the potential of their Vision 2027 Strategy. This decision might encourage other mid-sized aerospace and defense companies to reassess their own valuations and growth strategies in light of the evolving industry landscape.
The board's unanimous decision to reject Albion River's unsolicited, non-binding indication of interest demonstrates a careful adherence to their fiduciary duties. By consulting with legal and financial advisors before making this decision, the board has taken appropriate steps to ensure they are acting in the best interests of the company and its shareholders.
The detailed explanation provided in the announcement serves two important legal purposes. First, it provides transparency to shareholders, potentially mitigating the risk of shareholder lawsuits claiming the board acted improperly in rejecting the offer. Second, it builds a strong defense against any potential hostile takeover attempts by Albion River or other interested parties.
The board's emphasis on their commitment to listen to all Ducommun shareholders and act in their collective best interests is a important statement. It demonstrates their awareness of their fiduciary responsibilities and could help protect against accusations of entrenchment or self-interest.
However, the board should remain vigilant. If Albion River decides to take their offer directly to shareholders or initiates a proxy fight, Ducommun's management will need to be prepared to defend their decision and strategy more robustly. The strength of their Vision 2027 Strategy and their track record of performance will be key in maintaining shareholder support in such a scenario.
Revised proposal undervalues Ducommun’s mid- and long-term growth initiatives and does not fully reflect the Company’s strong record of performance.
Ducommun’s Board and Management remain focused on successfully delivering our Vision 2027 Strategy.
COSTA MESA, Calif, July 25, 2024 (GLOBE NEWSWIRE) -- Ducommun Incorporated (NYSE: DCO) (“Ducommun” or the “Company”), a global supplier of innovative electronic systems and structural solutions for the aerospace and defense industry, today responded to an unsolicited revised, non-binding indication of interest dated July 15, 2024 from Albion River LLC (“Albion River”), a private direct investment firm, to acquire all outstanding shares of Ducommun for
Consistent with its fiduciary duties and in consultation with its legal and financial advisors, our Board of Directors carefully reviewed and considered Albion River’s revised proposal. Following that review, our Board of Directors concluded that the Company’s previously disclosed Vision 2027 Strategy reflects a substantially better long-term value creation opportunity for Ducommun’s shareholders.
Over the past seven years, our Board and Management team have effectively transformed the Company’s business with strategic acquisitions of engineered product businesses with high aftermarket mix, implementation of a value-based pricing strategy, significant facility consolidation, improved operations and customer metrics, a leaner management structure and many other cost reduction actions. Despite the impact of the COVID-19 pandemic and the 737MAX on our markets, Ducommun’s revenue has grown from
In December 2022, Ducommun management held an investor meeting to lay out Vision 2027 and has been executing on that strategy by consolidating its facility footprint, continuing its targeted acquisition program, increasing the revenue proportion of engineered product and aftermarket content, implementing our offloading strategy with defense primes in high growth segments of the defense budget, and by expanding content on key commercial aerospace platforms. These strategic initiatives already have positioned Ducommun to benefit from the continuing recovery in aircraft production rates over the next several years. Ducommun’s market capitalization has increased to approximately
Our Board of Directors believes that Albion River’s revised proposal significantly undervalues Ducommun’s long-term value for shareholders. We remain committed to our strategy to substantially grow and increase the long-term value of Ducommun for its investors. Our Board of Directors and management will continue to listen to all Ducommun shareholders and act in their collective best interests.
About Ducommun Incorporated
Ducommun Incorporated delivers value-added innovative manufacturing solutions to customers in the aerospace, defense and industrial markets. Founded in 1849, the company specializes in two core areas – Electronic Systems and Structural Systems – to produce complex products and components for commercial aircraft platforms, mission-critical military and space programs, and sophisticated industrial applications. For more information, visit Ducommun.com
Forward Looking Statements
This press release includes “forward looking statements” within the meaning of the of the federal securities laws relating to Ducommun Incorporated, including any statements about its 2027 Vision Strategy and similar expressions that concern Ducommun’s intentions or beliefs about future occurrences, expectations, or results. Forward looking statements are subject to risks, uncertainties and other factors that may change over time and may cause actual results to differ materially from those that are expected. It is very difficult to predict the effect of known factors, and Ducommun cannot anticipate all factors that could affect actual results that may be important to an investor. All forward-looking information should be evaluated in the context of these risks, uncertainties and other factors, including those factors disclosed under “Risk Factors” in our reports filed with the Securities and Exchange Commission, including the Company’s Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and Current Reports on Form 8-K. The forward-looking statements included in this press release are made only as of the date of this press release, and Ducommun does not undertake any obligation to (and expressly disclaims any such obligation to) update the forward-looking statements to reflect subsequent events or circumstances.
CONTACTS:
Suman Mookerji, Senior Vice President, Chief Financial Officer, 657.335.3665
FAQ
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