An Ottawa tech firm may find its U.S. owners selling off the company.
EMS Technologies has been told by one of its investors that shareholders are not getting enough return and after 10 years the company's stock value and financial picture are pretty much unchanged.
The Ottawa facility of EMS employs about 260 people making satellite communications gear. It was originally CAL Corp. before it was sold in the early 1990s. The company then had several years of sales growth in the area of 40 per cent a year.
In the last quarter, sales were down, but profits were up because of streamlining. Yet there were also warnings of tough times ahead.
Now, MMI Investments of New York says the company will never be big enough to really improve its situation, and in a climate of strong mergers and acquisitions they should look at selling off some or all of the company.
The chairman of the board responded on Thursday: "The Board and management team are committed to undertaking actions that will enhance value for all of our shareholders," said John Mowell.
In its letter, MMI says selling off the entire operation or just the LXE division based in the U.S. could provide a big boost: "stock price improvement for these strategies is potentially from over 20 per cent to over 60 per cent."
MMI has a reputation for getting companies in which it holds an interest being sold for a profit.
