Aerospace smallcap Quickstep Holdings jumps nearly 100% after 40cps takeover offer

Quickstep Holdings (ASX:QHL) has received a takeover offer for 40cps, sending shares 100% higher as the stock doubled its price on Thursday.

The company has received an offer at double its price from the Australian Sovereign Defence and Advanced Manufacturing Group (ASDAM).

The group is a consortium of private players including engineering firms and TAE Aerospace, an Australian-based global aviation engineering player with a strong US presence.

“In August 2022, with the sale of the TAE Aerospace company to CPE Capital to join the ASDAM Group … [TAE’s] depth and breadth of sustainment capability was significantly increased,” the company writes on its website.

Now, ASDAM is seeking to buy out Quickstep in all cash offer. Worth noting is that once Quickstep is bought out, shareholders in public markets will lose exposure. ASDAM is bankrolled by private capital player CPE Capital.

Still, Quickstep noted the significant shareholder value ASDAM (or CPE’s) deal presents.

The deal also just makes sense. On Thursday, the company announced it had improved contract terms with Lockheed Martin relating to an existing contract working on C-130 Hercules multi-purpose planes.

“Through extensive negotiations, the Company has secured volume and increased pricing for the C-130 program post-MYIII contract, covering deliveries from February 2025 to December 2029,” Quickstep wrote on Thursday.

Notably, Lockheed Martin is a key customer of ASDAM. With TAE part of ASDAM, it makes sense that Quickstep’s existing work with the company would be of interest to, let’s not beat around the bush, CPE Capital.

“As one of Quickstep’s largest customers, through [consortium member] Marand, ASDAM wants to work constructively with the Quickstep Board to conclude a value-creating deal for shareholders,” ASDAM CEO Rohan Stocker said.

Quickstep released its FY24 results on Thursday, too.

Post-tax profits were at a loss of -$5.71M in FY23; in FY24, that eased to -$4.77M. Revenues were higher in FY24 at $99.34M vs $94.38M pcp.

QHL last traded at 38.5cps.

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