ATSC: Strategic Alternatives

A surprise news announcement by ATSC on Friday makes for a quick return on our investment. On Friday the company announced that:

today announced that the Board of Directors has begun a process to evaluate strategic alternatives for the Company.  Board Chairman Dr. Edward H. Bersoff explained that “The Board continues to believe that the current market value of the Company’s shares does not reflect its underlying value and prospects.”

This was a surprise announcement. The management and Board had mentioned multiple times their disappointment w/ the share price. Although the company was focused on growing the business and potentially acquiring other companies. My investment in ATS was based on the company growing organically and through acquisitions. Although given its strong backlog, relationship w/ customers, and discounted share price I saw the company as a good acquisition candidate.

The company also mentioned that the new CEO has decided to leave the company.

The Company also announced that President and Chief Executive Officer Sidney E. Fuchs, who joined the Company during 2010, has decided to depart from the Company.  Dr. Bersoff commented, “In light of the Board’s  decision to begin this process,  Sid concluded that it was in his best interests to pursue other opportunities.”

This makes me think that the company had been looking at selling itself but had not decided on pursing that path. The CEO leaving means the company is confident it can sell itself for a fair price.

With no CEO at the helm, I think we see a closure on ATS very quickly, in a couple of months.

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