DCC Energy plc (DCC LN) has agreed to a recommended take-private acquisition by the KKR/Energy Capital Partners consortium, valuing the company at approximately £5.75 billion, after rejecting the consortium’s initial £5.0 billion proposal and negotiating up from a revised £5.7 billion offer submitted June 10. Shareholders will receive 6,525 pence per share in cash plus the FY2026 final dividend of 147.22 pence (already paid July 23), and may receive an additional contingent payment of up to 125 pence per share tied to the successful sale of the Nexora Technology business for at least $800 million, bringing total potential consideration to £67.97 per share, a roughly 26% premium to DCC’s pre-approach share price.

The Board unanimously recommended the deal given the valuation and removal of execution risk, with completion expected in 1Q 2027 pending shareholder, court, and regulatory approvals; the company has also been renamed DCC Energy plc to reflect its transformation into a pure-play energy business. This follows the completed £945 million Healthcare divestment and £600 million tender offer from late 2025, alongside continued portfolio moves including the FLAGA GmbH and UGI International liquid-gas acquisitions and the ongoing evaluation of strategic alternatives for the remaining Technology segment. 

Considering the announcement of the agreed upon acquisition, we will discontinue Radar coverage of DCC Energy going forward.

LXFR agrees to be acquired by Wynnchurch Capital for $17.37 per share in cash; the transaction is expected to be completed before the end of 2026

Luxfer Holdings (NYSE: LXFR), which completed the divestiture of its Graphic Arts business in July 2025, announced an agreement to be taken-private by Wynnchurch Capital, L.P. for $463 million or $17.37 per share in cash.

The transaction, which has been unanimously approved by the Board and is expected to close before the end of calendar 2026, implies a ~31% premium to the stock’s closing price on April 28, 2026 (the day before the company reported 1Q 2026 results, modestly increased full-year guidance and indicated that it continued to pursue value-unlocking strategic alternatives).

In our view, the deal, which includes non-solicitation provisions as well as termination penalties of $18 million and $32.25 million for LXFR and Wynnchurch, respectively, is likely to close as announced, particularly considering it is broadly consistent with our initial estimate of fair value (i.e., ~$450 million or ~$17 per share).

Upgrade HONA to BUY (from NEUTRAL) as Post-Spin Pullback Presents a More Attractive Entry Point into a Core A&D Supplier with Defense & Space Exposure and A Growing High-Margin Aftermarket Component

Recall, Honeywell Aerospace (NASDAQ: HONA) was spun-off, tax-free, from Honeywell Technologies (NASDAQ: HON) on June 25, 2026.

For perspective, in so-called “when-issued” trading shares of Honeywell Aerospace (HONAV) opened (and closed) on 6/15/2026 at $200 per share on de minimis volume before hitting a high on 6/17 of $269.95 per share (on volume of ~10K shares) before consistently trading down to $245 per share on 6/24 (on average daily volume of ~30K shares) and ultimately closing on 6/26/2026 at $221.01 per share (on volume of ~3.5 million shares).

That said, so far, in “regular way” trading shares have declined an incremental ~11.5% (versus a ~1% rise in the S&P 500 and a ~2.5% decline in the Russell 2000); to that end, the stock currently trades at ~14.5x 2027E EV/EBITDA, ~19.5x 2027E EPS and a free cash flow (FCF) yield of ~4.5%, which represents a stark discount to peers, perhaps most relevantly RTX Corporation (NYSE: RTX), which includes the Collins Aerospace & Pratt & Whitney subsidiaries, at ~17.6x 2027E EV/EBITDA, 27.5x 2027E EPS and a ~3.0% yield, respectively.

From our perspective, the stock’s initial weakness has not been wholly unexpected considering the back end weighted medium-term guidance that was delivered at its capital markets day (on June 3rd), which was in stark contrast, at least on a relative basis, to the front-end loaded guidance provided by RemainCo. A sentiment we articulated at the time.

In terms of a baseline, on a pro forma basis, HONA expects full-year 2026E sales to rise ~7%-9%, implying sales of $18.6-$19.0 billion, by our calculation, driven by mid-to-high single digit growth across all three segments, with adjusted EBIT of $4.65-$4.75 billion, implying a margin of ~25%. Also, HONA expects to generate ~$1.0-$1.5 billion (see Exhibit 1) in 2H 2026 (i.e., the back-half).

The company expects to report 2Q 2026E results, it’s first as a standalone company, after the market close on August 4th with a conference call that evening at 5 p.m. (ET). Based on reported results at its former parent, which still included the Aerospace business, HONA is implied to have generated, by our calculation, ~$4.5 billion of sales, ~$1.075 billion of operating profit (versus consensus of ~$4.6 billion, $1.1 billion) and $796 million of FCF.

In the medium-term (i.e., 2025-2028E), HONA has guided to consolidated annual top-line growth of ~6%-8% (see Exhibit 2), driven by mid-to-high single digit growth in both the commercial OE market and commercial aftermarket (AF), supported by aging fleets, and multi-year backlogs among both commercial & business customers (i.e., ~$18.6 billion at the end of 1Q 2026), while defense & space is expected to grow at a mid-single digit rate as national defense spending has become a higher priority globally in the current geopolitical environment (e.g., Canada, Germany, India, Japan, Turkey & the U.K. all significantly ramping spending). Adj. EBIT is expected to grow at a faster rate than sales, at ~9% in 2025-2030E primarily driven by volume/mix, price/cost & productivity, implying ~$6.5 billion in adjusted EBIT in 2030E and an adj. margin of ~25.5%-28.0%.

Free cash flow is expected to grow at an even faster clip than EBIT at a rate of ~10% annually, implying total free cash flow of ~$4.0 billion in 2030E (i.e., on an aggregate rather than cumulative basis). Company-funded (as opposed to customer-funded) research & development (R&D) costs are expected to be >4% of sales (slightly above its 3-year average) while maintenance capital spending is projected to be ~1%-2% of sales, which we think in tandem support a solid pipeline of next-generation avionic, engine & communication systems as well as emerging advanced air mobility (AAM) capabilities, such as electric vertical takeoff & landing (eVTOL) & urban air mobility.

Anecdotally, our conversations with investors as well as the stock price suggest that while HONA’s medium-term outlook wasn’t overtly disappointing its was perhaps slightly underwhelming on several fronts, including top-line growth projected only in-line to modestly above market growth and its commentary that anecdotally suggested the progression of EBIT & FCF generation will not be linear given, among other things, initial standup costs/dis-synergies as well as the intent to front-end load growth investments, implying an acceleration in those metrics is more likely pushed out until 2029-2030 (with implied incremental margins improving from the 20%-25% range in 2027E-2028E to a more respectable ~30% or above in 2029E-2030E).

That said, we do think the long-term backdrop for HONA’s global platform given its sector/market exposures, growing backlog as well as the fact that high-margin, recurring MRO/aftermarket work, of which ~70% is subject to long-term contracts, should exceed 50%-55% of sales over the next decade, lend credence to management’s aspirations of achieving ~$30 billion of sales (10-years out), although we discern this target likely includes a modicum of tuck-in M&A activity.

Regarding the deployment of free cash flow which we estimate could be ~$15 billion (on a cumulative basis) in 2H 2026E-2030E, the company intends to maintain a disciplined capital allocation paradigm, focused on investing in organic growth opportunities/innovation, which will complimented by strategic tuck-in acquisitions (aimed at adding technology capabilities or expanding its global footprint into attractive markets) as well as returning capital to shareholders. On the latter front, the company intends to institute a “competitive” (but as yet undefined) dividend and engage in opportunistic share repurchases. All that said, the company targets the maintenance of a 2.5x leverage ratio over the medium term (modestly above the group average, which is closer to 1.5x, by our calculation).

All told, given the post-spin dip in HONA’s stock price (i.e., 11.5% versus a 1% rise in the S&P) as well as its discount to broader peers, including RTX (i.e., 14.5x versus ~17.5x) and the implied upside of ~25% to our fair value estimate we lift our recommendation to BUY (from NEUTRAL).

Please see our initiation report dated June 12, 2026 and spin-off completion update dated June 29, 2026 for more information.

Close coverage of SMG, effective as of today’s market bell, with shares trading roughly in line with our fair value estimate (FVE) and the divestment of its cannabis-related assets completed

• For context, shares of The Scotts Miracle-Gro Company (NYSE: SMG) returned ~42.5% (outperforming the S&P 500 and Russell 2000 indexes by ~13.5% and ~0.1%, respectively) since our initial recommendation in December 2024.
• That said, with the stock trading roughly in-line with our initial fair value estimate of ~$72 per share (with bull & bear cases of $80.50 & $63.50) and the divestment of its cannabis-related assets (i.e., Hawthorne) completed during 2Q F2026, we prefer to maintain a disciplined approach and focus our resources on potentially more compelling/topical special situations; thus, we will close coverage/withdraw our recommendation of SMG, as of today’s market close.  (As such, our estimates will not be updated moving forward and should not be relied upon in the future, other than simply for reference.)
• As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts or if incremental strategic options emerge. 

MIDD Completes the Tax-Free Separation of its Commercial Food Service and Food Processing Businesses

Distribution: On July 6, 2026, at 12:01 a.m. (ET), The Middleby Corporation (NASDAQ: MIDD) completed the tax-free spin-off of 100% of its Food Processing business, Midera Food Processing (NASDAQ: MFP).  RemainCo will consist of the Commercial Foodservice business and maintain its current listing while SpinCo (i.e., Midera) will trade under the NASDAQ ticker MFP. Shareholders of record received one share of MFP for every share owned of MIDD (i.e., a 1-for-1 distribution ratio). 

When-issued Trading: For perspective, in the so-called “when-issued” trading shares of Midera Food Processing (MFPVV) opened (and closed) on 6/29/2026 at $35 per share on volume of 82K shares before hitting a high on 6/30 of $40 per share (on volume of ~30K shares) and ultimately closing on 7/6/2026 at $35.05 per share (on average volume of ~150K shares). For its part, Middleby (MIDDV) opened & closed on 6/30/2026 at $81 per share on volume of less than 1K shares before opening & closing on 7/2-7/6 at $139.52 (on aggregate volume of just 1.5K shares).

Regular-way Trading & Indexation: Shares of MFP (as well as post-spin MIDD) commence so-called “regular way” trading this morning, July 7, 2026. Pre-spin MIDD is a member of the S&P Mid-Cap 400; by our calculation the leading mid-cap focused ETFs (e.g., IJH, MDY, SPMD, IWR, SPMD & IVOO) collectively own slightly less than 6% of the float (or nearly 2.5 million shares) with roughly 20% of the shares being controlled by ETFs more broadly. For its part, post-spin MFP is set to replace Redwood Trust (NYSE: RWT) in the S&P SmallCap 600 before the market open on July 8^th.  So, while we can envision some mild initial index-related pressure for SpinCo (i.e., MFP) we also acknowledge the possibility for some shareholder rotation-related volatility at RemainCo (i.e., MIDD), which is positioned as the relatively slower growing (i.e., ~3%-6% organic sales growth) but more profitable (i.e., margins of 20% in 2026E improving to ~25%-27% in 2028E), less capital intense/higher free cash flow (FCF) generating (i.e., capex <2% of sales & FCF conversion of ~100% of net income) entity albeit being initially more levered (i.e., net leverage of ~2.8x moving to 2.5x by the end of 2026E) and more broadly focused on capital returns, primarily via share repurchases while, on the other hand, SpinCo (i.e., MFP) will emerge as the faster growing concern (i.e., ~5%-7%, on an organic basis, with incremental upside from acquisitions), albeit with lower margins (i.e., ~18% in 2026E moving to ~20%-23% in 2028E), free cash flow conversion (i.e., 50%-55% of adj. EBITDA on a capex spend of ~2.0%-2.5% based on sales) and initial leverage (i.e., $200-$225 million or ~1.25x); that said, post-spin Midera management indicates comfort with flexing its leverage ratio up to ~3.0x as it pursues an active acquisition strategy.

Pre- & Post-spin Recommendations: Following our initial pre-spin BUY in May 2026, shares of consolidated MIDD appreciated ~25% (outperforming the S&P 500 and Russell 2000 by ~24% and ~18.5%, respectively). 

All told, on a post-spin basis, we value RemainCo (i.e., Commercial Foodservice) at $148 per share and ~$39.50 per share from SpinCo (i.e., Food Processing or Midera), based on a one-for-one distribution ratio (and 2028E EV/EBITDA multiples of 12.5x and 10x, respectively).  Given the implied upside to our fair values estimate (FVE) following the strong pre-spin stock price appreciation (i.e., shares up ~25% since late-May) our initial recommendations for both post-spin entities are NEUTRAL.  As mentioned earlier, in the longer term, while RemainCo (MIDD) will be focused on shareholder returns, SpinCo (MFP) could see a higher degree of multiple re-rating over time if it can successfully execute on its M&A strategy (i.e., establish itself as a high-quality foodservice compounder within a fragmented global market). 

Also, please see The Spin-Off Report dated May 21, 2026, for more information (as well as the Appendix on pages 4-7).

SPGI Recasts its Post-Spin Reporting Structure; Downgrade Shares to NEUTRAL (from BUY) given Strong Post-Spin Price Appreciation and Shares Trading Roughly In-Line with our Initial Fair Value Estimate (FVE)

Today, S&P Global (NYSE: SPGI), which completed the tax-free separation of Mobility Global Inc. (NYSE: MBGL) on July 1st, provided a recast of its post-spin operating structure as well as updated financials.

To that end, we note that S&P Global will provide certain post separation services to Mobility Global on a transitional basis under the Transition Services Agreement, which amounted to ~$35 million for 2025. We also note that the Energy division bears the bulk of costs historically allocated to Mobility that do not meet the requirements to be presented in discontinued operations.

Also, Market Intelligence will now present Kensho Data & Platforms (60% of re-cast 2025 division revenue) and Enterprise Solutions (40%). We see the rebranding of Data, Analytics & Insights into Kensho Data & Platforms as sharpening its focus on AI-powered distribution (i.e., Kensho is S&P’s major AI investment) while the consolidation of its distribution capabilities under a single brand is also seemingly the first step toward better competing with Bloomberg and Factset. Enterprise Solutions will include lending solutions (i.e., ClearPar, Debtdomain, pricing & reference data, Notice Manager, and Wall Street Office), market solutions (i.e., iLEVEL, Primary Markets Group, and Valuation Services), and software & regulatory solutions (i.e., Cappitech, Corporate Actions, Counterparty Manager, Financial Risk Analytics, and Tax Solutions), acting as a potentially higher-growth vertical, albeit more volatile. Further, Market Intelligence will transfer 451 Research and Maritime & Trade to Energy, as well as Credit Analytics to Ratings. This is in line with our initial thoughts that RemainCo will transform into ‘an integrated all-service financial information platform, with Market Intelligence [more specifically Kensho Data & Platforms], or its equivalent, being at the center.

Energy will now present Platts (49% of re-cast 2025 division revenue) and CERA (51%). In our view, Platts will serve as the bedrock of S&P’s Energy offerings by focusing on objective information (benchmarks, data, news), feeding into Market Intelligence (Kensho) and CERA. CERA, on the other hand, will offer more analytics and advisory/consultation services (e.g., CERAWeek); we reiterate our view that Energy will venture into providing more advisory and consultation services given the emphasis on this ‘previously-hidden’ business line.

Given SPGI’s strong post-spin price appreciation, which has seen shares increase ~16.5% (versus a ~0.5% rise in the S&P 500 Index), and the shares trading roughly in-line with our initial fair value estimate we temper our recommendation to NEUTRAL (from BUY).

Please see our initiation report dated June 15, 2026 and spin-off completion report dated July 1, 2026 for more information.

On July 6, 2026, ITV plc (ITV LN) announced (following previous speculation) an agreement to sell its Media &
Entertainment business (M&E) to Sky Group, a European-based subsidiary of Comcast Corp. (NASDAQ: CMCSA), for total
consideration of up to ~£1.6 billion, consisting of ~£1.2 billion in cash, contingent considerations of ~£200 million as well as
the contribution of Sky’s Love Productions business (at an implied enterprise value of ~£200 million). The transaction,
which will result in ITV emerging a more pure-play content business primarily comprised of ITV Studios, is expected to
close in 2H 2027.

On July 4, 2026, Continental AG (CON GR) announced an agreement (following a strategic review announced in April
2025) to sell its ContiTech business (i.e., non-tire rubber & industrial plastics) to Lone Star Funds for ~£4 billion (plus
potential performance-based payouts of up to ~£250 million). The transaction, which comes following the spin-off of its
Automotive Group, Aumovio (AMVO GY), in September 2025 and will result in CON emerging as a pure-play tire
manufacturer, is expected to close by the end of 2026

Close coverage of CZR, effective as of today’s market bell, with shares trading roughly in line with the $31 cash take-out price agreed to in May 2026; we don’t envision “superior offers” during the “go-shop” period & regulatory approvals are likely to stretch well into 2027

For context, shares of Caesars Entertainment (NASDAQ: CZR) appreciated ~38% (outperforming the S&P 500 and Russell 2000 indexes by more than ~27% and ~17%, respectively) since our recommendation/initiation in October 2025.

That said, with shares trading roughly in-line with the $31 per share cash take-out agreed to with Fertitta Entertainment in late-May 2026 as well as our sense a “superior offer”, which, by our estimation, would have to be at least $35 per share given the agreed upon termination fee, is unlikely to materialize during the “go-shop period, which ends on July 11, 2026, we prefer to maintain a disciplined approach and withdraw coverage of CZR, effective as of today’s market close.

While we think the deal will ultimately close, as announced, from a time value perspective the regulatory process could stretch out 12-18 months (and leave investors exposed to considerable downside, likely back toward the ~$20 level, in the event the deal gets blocked/scuttled).

As always, we will continue to monitor the shares for an opportunity to re-recommend if valuation shifts (i.e., the deal falls through), which could re-open the potential for other strategic alternative options.

SPGI Completes the Tax-Free Separation of its Mobility Business

Distribution: On July 1, 2026, at 12:01 a.m. (ET), S&P Global Inc. (NYSE: SPGI) completed the tax-free spin-off of 100% of its Mobility business, Mobility Global (NYSE: MBGL). Shareholders of record received one share of MBGL for every share owned of SPGI; fractional shares were paid out in cash. Investors should expect re-casted standalone financial information for 2025-1Q 2026 on July 6, 2026.

Regular-way Trading & Indexation: Shares of MBGL (as well as post-spin SPGI) commence so-called “regular way” trading this morning. S&P Global will remain a member in the S&P 500 Index while Mobility Global is set to replace Core Laboratories (NYSE: CLB) in the S&P SmallCap 600 Index prior to the market open on July 2, 2026. We estimate ETF-related ownership totals ~6.5% of pre-spin SPGI float, which compared with our initial expectations suggests ‘forced selling’ of MBGL, while still significant, may be less draconian.

When-issued Trading: For perspective, shares of Mobility Global (MBGL-W) opened on 6/26/2026 at ~$26 per share on de minimis volume before closing on a low note at ~$21 per share on trading volume of ~40k. On 6/29/2026, shares rebounded slightly, fluctuating between $21.90-$23.20 per share on volume of ~165k. On 6/30/2026, the last day of “when-issued” trading, MBGL-W continued to trend in the $22-$23 range on volume of ~156k before ultimately closing at $22.05 per share. While this is roughly in keeping with our view that current holders would likely rotate out of MBGL, we are frankly somewhat surprised by the consolidation at the $22-23 level, which we attribute, in part, to the broader market rally. For its part, shares of post-spin SPGI (SPGI-W) opened ‘when-issued’ trading on 6/26/2026 at $391.50 per share before finally closing at $384.00 per share on 6/30/2026 on notably anemic trading volume.

Pre- & Post-spin Recommendations: Following our initial pre-spin NEUTRAL recommendation earlier this month, shares of consolidated SPGI declined ~3.8% (slightly underperforming the S&P 500 and Russell 2000 by ~1.1% and ~5.3%, respectively). We consider the stock movement to be broadly in line with our thesis that 1) investors are more focused on near-term macro pressures rather than underlying fundamentals over the medium-term; 2) the transaction was already fully priced in given the stock’s move since its announcement; and 3) technical support seemingly existed at ~$405 per share.

On a post-spin basis, we reiterate our fair value estimate of $437 per share (13.8% implied upside) and $16 per share (28.4% implied downside) for S&P Global and Mobility Global, respectively. As such, we initiate post-spin SPGI at BUY and MBGL at SELL. To be certain, our overall view has not materially changed; in the near-term, current holders will likely rotate out of MBGL and into post-spin SPGI as 1) the majority, if not largely all, of SPGI investors likely own it for the Ratings/Indices businesses; 2) the natural indexation effect/impact; 3) MBGL has some elevated spin-related costs near term as well as a lack of an independent execution track record; and 4) there are seemingly better opportunities, on a relative basis, for those investors targeting so-called growth stocks.

Regarding post-spin SPGI, while we are cautious on the macro headwinds, the current valuation appears too cheap to ignore, in our view. At $384.00, the stock is trading at ~15.3x our estimated 2027 EBITDA of ~$8.07 billion (compared to peers’ average 18.2x 2027E EBITDA and SPGI’s 5-year historical average of ~21.6x). For MBGL, we think the trend observed with MBGL-W is indicative of what is to come for MBGL, except that we suspect the downward move to likely be sharper and more pronounced in “regular-way” trading. On the other hand, at $22.05, the stock is trading at ~16.6x our estimated 2027 EBITDA of ~$512 million (compared to peers’ average 14.9x 2027E EBITDA). In essence, we think the implied valuation is incorrectly skewed (i.e., SpinCo at an implied premium to RemainCo) as we do not think Mobility Global ought to command a higher valuation multiple than post-spin SPGI. That said, as MBGL plays through the bottoming out process, we think there me be opportunities to make trading gains as the company attracts its own investor base. As always, we will monitor the shares of both entities and update investors if/when we identify attractive entry points.

Please see our initiation report dated June 15, 2026 for more information.