Hammond Power (HPS-A) ran 8% after announcing a $50M capital expansion in Texas, supporting $250M of US revenue for large standard and custom transformers…

… which should drive margin expansion at the corporate level. Using a conservative 15% EBITDA margin assumption on that $250M…

… backs into a sub-2x build multiple, making organic growth the obvious choice versus M&A (outside of technology/geographic expansion)…

… given the market is paying 14x for that EBITDA once operational (a discount to peers), which makes me think the bid wasn’t enough - especially considering there’s room to scale the facility to $400M if demand supports it.

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