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DMC Global (BOOM) Board Reviews Steel Connect's Offer
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DMC Global (BOOM - Free Report) has issued a statement that its board of directors is considering Steel Connect’s recent unsolicited proposal to acquire its outstanding shares, which it does not own, at $16.50 per share. DMC Global’s board is currently evaluating the offer in consultation with legal and financial advisors.
Steel Connect currently owns a 9.8% stake in DMC Global. On May 31, 2024, it made a non-binding proposal to acquire the remaining outstanding shares of DMC Global. The offer price of $16.50 per share represents a 25% premium to BOOM’s closing share price as of May 30. The offer price is also 22% higher than the 30-day average closing price of $13.47 per share.
DMC Global owns and operates Arcadia Products, DynaEnergetics and NobelClad, three innovative, asset-light manufacturing businesses. Each of these businesses offers specialized products and engineered solutions to the construction, energy, industrial processing and transportation markets.
In December 2021, DMC Global completed the acquisition of 60% of the membership interests in Arcadia Products, LLC, a Colorado-based company, which led to the formation of Arcadia Products. It designs, engineers, fabricates and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions for the commercial construction market.
DynaEnergetics designs, manufactures, markets and sells perforating systems and associated hardware for the global oil and gas industry. NobelClad manufactures explosion-welded clad metal plates that are utilized in the construction of corrosion-resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas processing equipment.
In 2023, Arcadia Products represented approximately 42% of DMC Global’s total revenues, with DynaEnergetics contributing 44% and the NobelClad segment accounting for approximately 15%.
Given Arcadia Products’ large addressable market and differentiated business model, DMC Global plans to focus on this segment to drive financial and operational growth. Arcadia Products is capitalizing on new digital technologies and industrial engineering initiatives to strengthen operations and increase manufacturing capacity. Phase one of a new enterprise resource planning system that was implemented in the third quarter of 2023 led to improved operating efficiencies.
Key growth initiatives planned for the segment for 2024 include utilizing new painting capacity to boost sales and expanding the availability of Arcadia’s product offerings (commercial exteriors, commercial interiors and ultra-high-end residential) across all branch locations throughout the western and southwestern United States.
To simplify its portfolio and focus more on the Arcadia Products business, DMC Global’s board initiated a review of strategic alternatives for the DynaEnergetics and NobelClad segments in the first quarter of 2024. The board has been supervising the assessment process, which includes sale options, a merger or other business combinations involving one or both businesses. However, no definitive timeline has been set for the conclusion of the process and the company stated that it might not even materialize in a transaction.
Price Performance
Shares of DMC Global have fallen 23.7% in the past three months compared with the industry’s 16.5% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
DMC Global currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Kaiser Aluminium’s 2024 earnings is pegged at $4.12 per share, which indicates year-over-year growth of 50.4%. The consensus estimate for earnings has gone up 15% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 137%. KALU shares have gained 11.4% in the past three months.
The consensus estimate for Zebra Technologies’ 2024 earnings is pegged at $12.11 per share. The consensus estimate for earnings has moved up 9% in the past 60 days. The estimate indicates year-over-year growth of 23%. The company has a trailing four-quarter average earnings surprise of 8.56%. ZBRA shares have gained 6% in the past three months.
The Zacks Consensus Estimate for Brady’s 2024 earnings is pegged at $4.13 per share, which indicates year-over-year growth of 13.5%. The consensus estimate has moved up 3% in the past 30 days. The company has a trailing four-quarter average earnings surprise of 6.7%. BRC shares have gained 14% in the last three months.
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DMC Global (BOOM) Board Reviews Steel Connect's Offer
DMC Global (BOOM - Free Report) has issued a statement that its board of directors is considering Steel Connect’s recent unsolicited proposal to acquire its outstanding shares, which it does not own, at $16.50 per share. DMC Global’s board is currently evaluating the offer in consultation with legal and financial advisors.
Steel Connect currently owns a 9.8% stake in DMC Global. On May 31, 2024, it made a non-binding proposal to acquire the remaining outstanding shares of DMC Global. The offer price of $16.50 per share represents a 25% premium to BOOM’s closing share price as of May 30. The offer price is also 22% higher than the 30-day average closing price of $13.47 per share.
DMC Global owns and operates Arcadia Products, DynaEnergetics and NobelClad, three innovative, asset-light manufacturing businesses. Each of these businesses offers specialized products and engineered solutions to the construction, energy, industrial processing and transportation markets.
In December 2021, DMC Global completed the acquisition of 60% of the membership interests in Arcadia Products, LLC, a Colorado-based company, which led to the formation of Arcadia Products. It designs, engineers, fabricates and finishes aluminum framing systems, windows, curtain walls, storefronts, entrance systems, and interior partitions for the commercial construction market.
DynaEnergetics designs, manufactures, markets and sells perforating systems and associated hardware for the global oil and gas industry. NobelClad manufactures explosion-welded clad metal plates that are utilized in the construction of corrosion-resistant industrial processing equipment and specialized transition joints for commuter rail cars, ships, and liquified natural gas processing equipment.
In 2023, Arcadia Products represented approximately 42% of DMC Global’s total revenues, with DynaEnergetics contributing 44% and the NobelClad segment accounting for approximately 15%.
Given Arcadia Products’ large addressable market and differentiated business model, DMC Global plans to focus on this segment to drive financial and operational growth. Arcadia Products is capitalizing on new digital technologies and industrial engineering initiatives to strengthen operations and increase manufacturing capacity. Phase one of a new enterprise resource planning system that was implemented in the third quarter of 2023 led to improved operating efficiencies.
Key growth initiatives planned for the segment for 2024 include utilizing new painting capacity to boost sales and expanding the availability of Arcadia’s product offerings (commercial exteriors, commercial interiors and ultra-high-end residential) across all branch locations throughout the western and southwestern United States.
To simplify its portfolio and focus more on the Arcadia Products business, DMC Global’s board initiated a review of strategic alternatives for the DynaEnergetics and NobelClad segments in the first quarter of 2024. The board has been supervising the assessment process, which includes sale options, a merger or other business combinations involving one or both businesses. However, no definitive timeline has been set for the conclusion of the process and the company stated that it might not even materialize in a transaction.
Price Performance
Shares of DMC Global have fallen 23.7% in the past three months compared with the industry’s 16.5% decline.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
DMC Global currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the Industrial Products sector are Kaiser Aluminum (KALU - Free Report) , Zebra Technologies (ZBRA - Free Report) and Brady (BRC - Free Report) . While KALU and ZBRA sport a Zacks Rank #1 (Strong Buy), BRC carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kaiser Aluminium’s 2024 earnings is pegged at $4.12 per share, which indicates year-over-year growth of 50.4%. The consensus estimate for earnings has gone up 15% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 137%. KALU shares have gained 11.4% in the past three months.
The consensus estimate for Zebra Technologies’ 2024 earnings is pegged at $12.11 per share. The consensus estimate for earnings has moved up 9% in the past 60 days. The estimate indicates year-over-year growth of 23%. The company has a trailing four-quarter average earnings surprise of 8.56%. ZBRA shares have gained 6% in the past three months.
The Zacks Consensus Estimate for Brady’s 2024 earnings is pegged at $4.13 per share, which indicates year-over-year growth of 13.5%. The consensus estimate has moved up 3% in the past 30 days. The company has a trailing four-quarter average earnings surprise of 6.7%. BRC shares have gained 14% in the last three months.