TechPrecision stockholder Wynnefield Capital sends open letter to Board

TechPrecision’s largest institutional stockholder, Wynnefield Capital and its affiliates, with a 4.5% beneficial ownership interest, issued a public letter to the company’s Board of Directors. Highlights of the letter include: “On Friday, December 1, 2023, Wynnefield’s counsel called TechPrecision’s outside counsel to express our dismay at TechPrecision’s announcement of a definitive agreement to purchase Votaw Precision Technologies without holding a public conference call to explain its rationale for the proposed acquisition or how it would finance this huge acquisition of a company more than twice the size of TechPrecision. This announcement accelerated TPCS‘s recent share price decline to below $6.00, resulting in an end-of-day 52-week low of $6.06 per-share and a year-to-date decline of 26.8% as of November 30, 2023…the TechPrecision Board of Directors has remained silent. The…potential total purchase price of $110M, excluding significant transaction costs and other unknown quantities. In comparison, TechPrecision’s market capitalization totals approximately $53M. The company has just $0.1M in cash and $12.5M in long-term debt and long-term lease liabilities as of September 30, 2023…Wynnefield, like other stockholders, is concerned about how the Board of Directors and management intend to pay for this transaction in a challenging capital-raising marketplace. We fear significant dilution of existing stockholders and an unsupportable increase in the company’s debt leverage…Stockholders know TechPrecision’s last acquisition, STADCO, is still not fully integrated after more than two years and remains a failed turnaround. This precedent suggests poor execution and judgement…The unfavorable vote against the Board of Directors undoubtedly reflects the company’s stockholders’ belief that STADCO’s underperformance was never fully explained…Wynnefield is asking for the company’s Board of Directors and management to greatly enhance the transparency of this proposed acquisition and the company’s operations in general…”.