Galloway Capital Partners takes 4.31% stake in Babcock & Wilcox

Published 02/06/2025, 13:38
Galloway Capital Partners takes 4.31% stake in Babcock & Wilcox

MIAMI - Investment firm Galloway Capital Partners, LLC, along with its affiliate Diveroli Investment Group, disclosed a 4.31% ownership in Babcock & Wilcox Enterprises, Inc. (NYSE: BW), a company specializing in energy and environmental technologies. Bruce Galloway, the Founder and Chief Investment Officer of Galloway, believes the company’s stock is currently undervalued given its potential.

The investment firm highlighted three main reasons for Babcock & Wilcox’s perceived undervaluation. First, the company’s 2024 bookings have increased by 39% to $889.6 million, with a backlog up 47% to $540.1 million, indicating potential revenue growth in 2025-2026. Second, Babcock & Wilcox’s proprietary BrightLoop technology, focusing on hydrogen and carbon capture, is expected to reach commercialization by 2026 with the goal of securing approximately $1 billion in bookings by 2028. Lastly, the firm noted an operational turnaround with a 13% rise in adjusted EBITDA in 2024, excluding BrightLoop, and a manageable net debt to EBITDA ratio of approximately 3x.

Galloway’s statement also pointed to the increasing demand for power infrastructure driven by a global surge in AI-driven data centers, positioning Babcock & Wilcox to potentially benefit from the trend due to its expertise in steam generation and natural gas conversions.

The investment firm’s analysis and stake acquisition are detailed in its Schedule 13D filing with the SEC, dated today. Galloway’s approach targets investments in undervalued publicly traded companies, aiming to identify catalysts that could unlock shareholder value.

This announcement does not constitute a recommendation to buy or sell securities, nor does it represent an offer to buy or sell any securities. The information is based on a press release statement.

In other recent news, Babcock & Wilcox Enterprises reported a notable revenue increase for Q1 2025, reaching $181.2 million, which surpassed the forecast of $159.9 million. However, the company recorded a larger-than-expected loss per share of $0.26, missing the anticipated loss of $0.14. In a strategic move, Babcock & Wilcox completed an exchange transaction involving approximately $48 million and $84 million of its existing senior notes for $101 million of newly issued 8.75% Senior Secured Second Lien Notes due 2030. This financial maneuver is part of the company’s broader strategy to manage its debt portfolio. DA Davidson maintained a Neutral rating on the company’s stock, with a price target of $1.00, noting the potential positive impact of successful refinancing. The firm emphasized Babcock & Wilcox’s ongoing efforts to improve its financial position through refinancing and extending debt maturities. The company also highlighted strong demand in its backlog and bookings, which indicates robust market demand for its technologies and services.

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