Kaman Corporation (NYSE: KAMN) experienced an exceptional surge in its stock value last Friday, skyrocketing on the charts with an astonishing 100.85% uptick, ultimately settling at $45.05 at closing. This upward trend in Kaman’s stock is directly linked to a pivotal strategic move – the company’s choice to undergo acquisition.
In a noteworthy development, Kaman (KAMN) finalized a binding agreement last week for acquisition by Arcline Investment Management, L.P. Arcline, a forward-looking private equity firm known for its vast expertise in investing in technology-driven industrial enterprises with a global footprint, orchestrated an all-cash transaction totaling approximately $1.8 billion in enterprise value. Once this transaction successfully concludes, Kaman is set to transform into a privately held entity.
The terms of the transaction state that Kaman stockholders would get paid $46.00 in cash for each share. Comparing this acquisition sum per share to Kaman’s closing share price on January 18, 2024, the final trading day before to the formal deal announcement, shows an amazing premium of almost 105%. Furthermore, the purchase consideration represents a premium of about 110% above the Kaman common stock’s volume-weighted average price (VWAP) for the ninety days prior to January 18, 2024.
The decision to enter into this strategic agreement follows a robust engagement between Kaman and Arcline, coupled with a meticulous evaluation of alternative avenues for value creation. Given the thorough scrutiny of various options recently undertaken by KAMN, the company asserts that this transaction is strategically aligned to maximize value for shareholders and is deemed to be in the best interests of Kaman, its employees, customers, and other stakeholders.
Over the preceding quarters, Kaman has made notable strides in executing its strategic vision by transforming its portfolio, channeling investments into innovation, embracing new growth technologies, and optimizing the company’s cost structure. Arcline, in recognizing the strength inherent in Kaman’s leadership, team, product portfolio, and exceptional employees, anticipates reaping the benefits of enhanced resources, expertise, and flexibility as Kaman assumes the status of a private entity post-closure.
The anticipated timeline for the completion of this transaction is set for the first half of 2024. Importantly, the transaction does not hinge on a financing condition, as Arcline intends to fund it through a well-balanced combination of committed debt and equity financing. Once finalized, Kaman will transition into a wholly owned subsidiary of investment funds managed by Arcline, and its common stock will cease to be listed on any public stock exchange.