Key Takeaways:
Rosen Law Firm reminded GPGI investors of the Sept. 14 lead plaintiff deadline in a securities fraud class action over the Husky deal.
The lawsuit, City of Warren Police and Fire Retirement System v. GPGI, Inc., No. 26-cv-05951 (S.D.N.Y.), alleges the company overstated the value of Husky Technologies and that the acquisition was partly motivated by fees for Resolute Holdings, according to the complaint.
GPGI shares fell about 44 percent from $23.12 on Feb. 26 to $12.94 on May 7 after short seller Jehoshaphat Research challenged the deal's value. Fourth-quarter results on March 12 showed Husky's pro forma adjusted EBITDA margin compressed 318 basis points to 26.1 percent, and first-quarter results on May 7 showed pro forma adjusted EBITDA down 40.2 percent year over year to $38 million.
The class period runs Nov. 3, 2025 to May 6, 2026. GPGI cut its 2026 pro forma adjusted net sales guidance to $1.95 billion to $2.10 billion from $2.183 billion to $2.228 billion, and pro forma adjusted EBITDA to $550 million to $610 million from $620 million to $650 million.
GPGI, formerly CompoSecure, completed the Husky acquisition on Jan. 12 and rebranded, with shares trading under the GPGI ticker replacing CMPO. The complaint alleges Husky was not on track to achieve the revenue and adjusted EBITDA targets in the proxy statement and that those targets lacked a reasonable basis in objective fact.
The company's fourth-quarter results showed Husky net sales of $520.8 million, up 6.1 percent year over year, and full-year net sales of $1.5687 billion, up 5 percent. Pro forma adjusted EBITDA fell 5.4 percent in the fourth quarter to $136.1 million and 3 percent for the full year to $373.4 million.
Rosen Law Firm represents investors on a contingency fee basis. Investors do not have to become lead plaintiff to participate in any recovery. The lead plaintiff is a representative investor appointed by the court to direct the litigation.
The litigation adds legal and reputational risk for GPGI as it integrates Husky, with potential settlement costs and restatement exposure weighing on the stock. Investors will watch the Sept. 14 lead plaintiff deadline and any further disclosures on Husky's financial performance.
This article is for informational purposes only and does not constitute investment advice.
