CAE Inc. Announces Renewal of Its Share Buyback Program

CAE Inc. Updates on Its Normal Course Issuer Bid

CAE Inc. has exciting news to share as it receives regulatory approval to renew its normal course issuer bid, referred to as NCIB. The company plans to buy back up to 16,019,294 of its common shares, a strategic move that demonstrates the company’s commitment to enhancing shareholder value.

Understanding the Buyback Plan

The renewal of the NCIB is set to commence soon, specifically starting on June 10. This renewed initiative allows CAE to repurchase approximately five percent of its outstanding shares, based on management’s discretion influenced by market conditions. This initiative represents a thoughtful approach in managing the company’s capital allocation.

Details Around the Purchasing Process

Purchases under the NCIB will be executed through the Toronto Stock Exchange (TSX) and also the New York Stock Exchange (NYSE), adhering to the regulations and guidelines established by these trading platforms. CAE has appointed RBC Dominion Securities Inc. to handle the buying of common shares for the NCIB, ensuring compliance with all regulatory requirements.

Automatic Repurchase Program Explained

Additionally, CAE has implemented an Automatic Repurchase Plan Agreement (ARPA) with RBC. This agreement allows the firm to make purchases even during blackout periods when CAE typically cannot engage in trades, ensuring they maximize their share repurchase potential while complying with all necessary regulations.

Repurchase Strategy and Expectations

During the life of the NCIB, CAE intends to strictly conduct purchases through open market transactions, avoiding any other means outside these established guidelines. The average trading volume over the last six months suggests that CAE can buy back a significant number of shares regularly. Specifically, the company can purchase up to 183,461 common shares per trading day, with opportunities for block purchases exceeding daily limits on a weekly basis.

Past Buyback Performance

Looking back at CAE's previous NCIB that began a year earlier, the company had approval to buy back 15,932,187 shares, ultimately purchasing 856,230 shares at an average price of $24.85. This demonstrates a proactive approach to managing its share structure, ultimately contributing to a healthier financial landscape for the company and its investors.

The Rationale Behind the Buyback

CAE's decision to renew its NCIB aligns with its overarching capital allocation strategy. The Board of Directors firmly believes this initiative serves as a beneficial use of capital, significantly enhancing shareholder value. Each repurchase reduces the number of outstanding shares and is expected to positively affect future earnings per share.

About CAE Inc.

CAE Inc. is committed to fostering a safer world through innovative training, simulation, and operational solutions for aviation professionals and defense forces. With a robust workforce of around 13,000 employees spanning over 40 countries, CAE continuously strives for excellence in its offerings, empowering personnel in critical roles across various fields.

Frequently Asked Questions

What is the purpose of CAE's NCIB?

CAE's NCIB is aimed at purchasing shares back for cancellation, enhancing shareholder value and managing its capital effectively.

Who manages the share purchases under the NCIB?

The designated broker, RBC Dominion Securities Inc., will manage all share purchases in compliance with applicable regulations.

How many shares can CAE repurchase on a daily basis?

Under the NCIB, CAE can buy up to 183,461 shares each trading day based on its average daily trading volume.

What impact does the buyback have on shareholders?

The buyback reduces the number of outstanding shares, which can lead to an increase in earnings per share and potentially higher share prices for remaining shareholders.

When did the last NCIB expire?

The previous NCIB authorized 15,932,187 shares and expired on May 29, 2025, with CAE successfully purchasing 856,230 shares during that period.

About The Author

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