Ducommon's board rejects $60-a-share unsolicited bid from Albion River

By Ciara Linnane

Offer 'is not in the best interests of the company,' says board

Ducommun Inc. said Tuesday its board is officially rejecting a $60-a-share unsolicited bid from Albion River LLC, after determining it's not in the best interests of the company.

The board of the maker of components for the aerospace and defense industry had acknowledged receiving the bid earlier in April. Albion River is a private investment company.

The news sent its stock (DCO) up sharply as the board said it would review and consider the offer.

Ducommun has been in business for 175 years, making it the oldest continuously operating company in California, it said at that time. The company had record revenue of $757 million in 2023.

The board "carefully reviewed and considered the offered pricing and the underlying proposed actions," the company said on Tuesday.

"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," it added.

The board has been working on that plan since late 2022, after spending the past seven years working to make Ducommun leaner and more efficient.

"Ducommun's Ebitda margins have expanded from 10% in 2016 to 13% in 2023. As a result, the company's shareholders benefited from an increase in market capitalization from approximately $286M at the end of 2016 to approximately $760M at the end of 2023," it said in a statement.

The Vision 2027 program will see the company consolidate its facilities, continue with targeted acquisitions, increase the revenue contribution from engineered product and aftermarket services and expand on key aerospace programs.

The company expects that to lead to revenue of $950 million to $1.0 billion by 2028, equal to 33% to 40% growth from 2022.

The stock was halted premarket for the news but has gained 6% in the year to date, matching the S&P 500's SPX gains.

-Ciara Linnane

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04-16-24 0851ET

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