Who are you, and how do you possess so much information that most others are unable to obtain? For example, where did you find out that EDAC engaged Stifel to find a buyer? How do know that all strategic buyers were approached and none were "remotely" interested? And, how did you find out that 3 financial buyers were the only ones at the table? I'll admit I only scanned the latest SEC filing, but don't recall seeing any of that info disclosed. And, I called Stifel, spoke with multiple people there, they would tell me nothing. I also called EDAC mgt, they would only point me to SEC disclosures. How the &$@/ is it that you know about these key issues that aren't getting disclosed to shareholders?
Yep, I did a poor job of scanning the filing. Missed that. Assumed EDAC hired Stifel after being approached with an offer. It is obvious they hired Stifel specifically to shop the company. My bad. Glad I did miss that though. Had I read it, I likely would have hit the exit, taken the $17.70 - 17.73. Lady Luck on my side.
This is disappointing. I am shocked there was not more interest, especially from strategic buyers. There are few opportunities to get positioned in Aero engine part manufacturing. And it's a significantly less cyclical area than other aspects of Aero. Would have thought the frame manufacturers would jump on it. The size of the deal could have been a factor. $100 M is chump change for most. Too much trouble.
Although, EDAC is a perfect fit for WWD. Woodward recently acquired an Aero frame manufacturer. While it does mostly biz jet work, they are trying to make in-roads into commercial. More importantly though, WWD is heavy into parts machining for gas turbines, wind turbines, et al. They could have easily recognized synergies with EDACs skills and facilities.
Now that we know it was shopped, far and wide, it is even more obvious that the jump in volume and price from mid-Feb was trading on insider info. Someone is going to get nailed here.
However, this raises an entirely new and troubling issue. When a public company hires a representative to find a buyer, an immediate disclosure is made to shareholders. Insiders who know the company is being shopped are sitting on material information. Just the act of not selling their shares during this period opens them up to insider trading accusations. We should have been told back in Oct that Stifel was engaged to look for a buyer for the company. Anyone who sold from Oct to the point of the $17.75 offer got harmed by that lack of disclosure, and I bet lawsuits will fly over this issue.
I can answer at least part of that. Look at filing SC 14D9 (dtd 3/26). The background to the sales process is in there. For instance, just a small excerpt:
"On October 11, 2012, at a meeting of the Company Board, with representatives of Stifel and R&C in attendance, Stifel discussed with the Company Board the names of potential buyers of EDAC and Stifel’s preliminary views on illustrative valuation ranges of EDAC that had been developed after consultation with management. The Company Board directed management to continue to work with Stifel regarding a potential sale transaction, including with regard to optimal timing for starting a sale process, taking into account the continued integration of EBTEC and facility relocation and consolidation plans.
At the Company Board’s direction, as part of a sale process, Stifel began contacting potential buyers regarding their interest in a potential transaction with EDAC in mid-January 2013. On January 14, 2013, before being contacted by Stifel, Party A, a potential financial acquirer which had previously expressed an interest in entering into a transaction with EDAC, verbally expressed an interest in acquiring EDAC at $16.00 per share, which price Party A indicated could increase subject to additional due diligence that might provide it with a better understanding of certain cost savings. At Stifel’s invitation, Party A accepted an opportunity to meet with management and tour EDAC’s new Cheshire facility on January 23, 2013. Party A indicated that it might submit a written indication of interest after this meeting and tour, but indicated to Stifel that it was not interested in participating in a sale process."
"Of the 26 parties contacted, 3 potential strategic buyers and 10 potential financial buyers entered into confidentiality agreements."