Quickstep shares double on takeover bid

Shares in aerospace composites manufacturer Quickstep increased 94 percent today to reach 38 cents on news of a takeover offer that would see the company join an expanding and market leading group of defence suppliers majority owned by CPE Capital.

CPE Capital is a highly experienced provider of development capital to medium sized growth businesses and has investments in a wide range of businesses, including manufacturers.

The bidder, ASDAM Operations, made up of leading companies Marand, Levett Engineering, Rosebank Engineering, TAE Aerospace, and RUAG Australia, pitched its offer at 40 cents, a 105 percent premium to Quickstep’s closing price on Wednesday and a 45 percent premium to the average price over the past three months.

According to its website: “ASDAM’s role is to provide continued access to capital and resources to build and grow sovereign industrial capability.”

Shares in Quickstep, which have languished as it went through a painful restructuring and divestment period as well as a change in leadership, immediately rallied to close to the bid price.

Quickstep’s immediate reaction was to say that it was considering the bid.

ASDAM Operations CEO Rohan Stocker said: As one of Quickstep’s largest customers, through Marand, ADSAM wants to work constructively with the Quickstep board to conclude a value-creating deal for shareholders.”

Quickstep supplies Marand with composite components for the twin tails of the F-35 joint strike fighter.

Quickstep has separate direct contracts with aircraft builders Northrop Grumman and Lockheed Martin for components for the F-35 and the C-130J Hercules transporter.

In many ways the heavy lifting in what a takeover bidder could be expected to achieve with a company has already been done by Quickstep.

The company restructured its structures businesses, closed its loss making maintenance operation and replaced Mark Burgess as CEO with Demi Stefanova.

Coincidentally before news of the takeover broke, Quickstep issued a statement that it has negotiated volume and price adjustments with its Tier 1 customers:

• C-130 Program with Lockheed Martin: Through extensive negotiations, the company has secured volume and increased pricing for the C-130 programme covering deliveries from February 2025 to December 2029
• F-35 Vertical Tail Program with Marand: The company has successfully concluded agreements for vertical tail component production which include pricing adjustments
• And F-35 Program with Northrop Grumman: We have received Lot 19 definitised purchase order firming the demand for FY26 to FY27 H1 component production.

According to Quickstep: “These negotiations have secured volume commitments and prices for the next few years and together with the restructure of the Bankstown business in July 2024 should result in appreciably increased profitability for our structures business.”

Further reading:
Quickstep clears the decks for return to growth, profit
Mark Burgess to leave Quickstep, Demi Stefanova is interim CEO

Picture: Quickstep