Browning West seeks to engage with CAE board on CEO recruitment process

Browning West, which has a substantial investment in CAE (CAE) representing a 4.3% economic interest in the company, released a letter to the board of directors of CAE, “We are writing to you on behalf of Browning West, which manages funds that have made a substantial investment representing a 4.3% economic interest in CAE. Browning West makes long-term investments in high quality businesses that we believe are undervalued relative to their full potential. We are constructive and engaged shareholders, with significant experience in enhancing corporate governance, recruiting and incentivizing proven leaders, and optimizing capital allocation. We greatly admire CAE’s business and its enviable market position within the attractive aerospace and defense industries. While CAE has underperformed over the past five years, our significant investment reflects our conviction in CAE’s tremendous long-term value creation potential. Over the medium-term, we believe that CAE has the potential to grow Earnings per Share and Free Cash Flow per Share well in excess of current market expectations. To fully realize this potential, the selection of CAE’s next CEO is critical. We are encouraged that the Board has taken the first steps toward recruiting a new CEO. However, we believe CAE must recruit a proven CEO with a verifiable track record of value creation. We urge the Board not to act hastily in its CEO search, but rather to engage with us to collectively recruit the best possible leader. In time, and with the right leadership, we believe the Company can reclaim its status as a Canadian, Quebec-based aerospace champion. We would welcome an opportunity to speak with you as soon as possible to share our views in detail, hear your perspective, and discuss the best path forward to ensure CAE’s success. We are releasing this letter publicly in order to facilitate an immediate conversation with you and CAE’s shareholders.”