On Monday, February 28th, before market open, Macdonald Dettwiler (TSX:MDA) will announce its fourth quarter and full year results for fiscal 2012.
Topline numbers are expected to be much higher because of Macdonald Dettwiler’s acquisition of Space Systems/Loral, which closed November 2nd. The proposed acquisition ignited shares of the company in June, when MDA said it would pay (US) $875-million plus cash dividends and other payments from Space Systems/Loral, which the company expected to be in excess of (US) $135-million. Macdonald Dettwiler CEO Dan Friedmann said the transaction, which essentially doubled the size of his company, was “game changing”.
Industrial Alliance Securities analyst Al Nagaraj says 2012 was a “transformational” year for Macdonald Dettwiler. He says the combination of the two companies will deliver advanced end-to-end solutions to satellite operators worldwide. Importantly, he notes, Macdonald Dettwiler is also now entitled to bid directly for projects in the United States. In a research update to clients this morning Nagaraj reiterated his Buy rating and a $75 price target on Macdonald Dettwiler.
Loral was founded in 1948 by William Lorenz and Leon Alpert as Loral Electronics Corporation. The company went public in 1959 and went on to form partnerships with Ford Aerospace, Qualcomm and IBM. In 1996, Lockheed Martin acquired the defense electronics and system integration businesses of Loral for $9.1 billion, and the company adopted the name it known by today. Loral’s revenue grew from $869-million in fiscal 2008 to more than $1.1-billion in 2011.
Nagaraj says his $75 price target on Macdonald Dettwiler is based on 12.9x his 2013 adjusted earnings estimate of $5.81.
Shares of Macdonald Dettwiler closed today down 1% to 64.60.