Success is, on the whole, a good thing. Even so, it can create its own set of problems, and Columbus McKinnon (CMCO)
shareholders are seeing that today (December 11), as the shares are
selling off on the surprising announcement of the CEO’s resignation to
take the top spot at Fortive’s (FTV) NewCo spinoff.
I
believe the loss of Mark Morelli is a significant one, as he oversaw a
transformational restructuring process (Blueprint for Growth) that has
seen Columbus McKinnon slim down and focus on growth opportunities in
material handling, and automation in particular. Although I think
Morelli leaves the company much better than he found it, the process of
finding a new CEO could well put the transformational process on “pause”
and there are always uncertainties when new leadership is brought into a
successful situation.
I’m cautiously optimistic
that Columbus McKinnon will navigate this transition well – I believe
the board has clearly seen the benefits of the strategy Morelli espoused
and implemented, and I would expect the board to find a new CEO who
will run the company along broadly similar lines. I’m boosting my
discount rate by a point to account for the added risk, but the shares
are still worth considering.
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Columbus McKinnon A Victim Of Its Own Success With An Unexpected CEO Transition
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