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Chad R. Abraham, a director at Columbus McKinnon Corp (NASDAQ:CMCO), recently acquired a significant amount of the company’s common stock, according to a recent SEC filing. On March 3, Abraham purchased a total of 20,000 shares in four separate transactions. The shares were bought at prices ranging from $16.02 to $16.10 per share, totaling approximately $320,900. The purchase comes as the stock trades near its 52-week low of $15.48, with InvestingPro analysis indicating the stock is currently undervalued. This acquisition brings his total direct ownership in the company to 20,000 shares. Columbus McKinnon, based in Charlotte, North Carolina, is a prominent player in the construction machinery and equipment sector. The $465 million market cap company has maintained dividend payments for 12 consecutive years and trades at an attractive Price/Book ratio of 0.53. InvestingPro subscribers can access 15 additional key insights and a comprehensive Pro Research Report about CMCO’s financial health and growth prospects.
In other recent news, Columbus McKinnon reported third-quarter earnings that fell short of expectations, with net sales decreasing to $234.1 million, a 7.9% drop compared to the same period last year. The company also announced a significant acquisition of Kito Crosby for $2.7 billion, which is anticipated to close later this year, pending regulatory approvals. The acquisition is expected to double Columbus McKinnon’s annual revenue and enhance its competitive position, though it will initially increase the company’s net leverage ratio to approximately 4.8 times pro forma Adjusted EBITDA. DA Davidson analyst Matt Summerville downgraded Columbus McKinnon from Buy to Neutral, citing concerns over increased leverage and deal complexity. Additionally, S&P Global Ratings placed Columbus McKinnon’s ’B+’ issuer credit rating on CreditWatch with negative implications due to the acquisition’s debt funding. Moody’s has also placed Columbus McKinnon’s ratings under review for a potential downgrade, focusing on the high financial leverage and integration risks associated with the acquisition. Conversely, Moody’s is reviewing Kito Crosby’s ratings for an upgrade, as the acquisition would integrate it into a higher-rated entity. Columbus McKinnon aims to de-lever to approximately 3.0 times within two years post-closing, using positive free operating cash flows to reduce its debt load.
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