ABM Industries Incorporated (NYSE:ABM), a provider of building maintenance and facility services, has settled a class action lawsuit and related legal actions, according to a recent filing with the U.S. Securities and Exchange Commission.
The original lawsuit, filed on March 11, 2024, by plaintiff Eric Miller on behalf of a putative class of stockholders, alleged that ABM's directors breached their fiduciary duties by adopting bylaws that imposed unreasonable requirements on shareholders nominating directors.
Following the lawsuit, ABM Industries faced two additional demands for action from alleged shareholders Robert Garfield and the Southeastern Pennsylvania Transportation Authority, claiming similar grievances. In response to these allegations, ABM amended its bylaws on March 27, 2024, which led to the mootness of the claims.
Despite denying any wrongdoing, ABM Industries agreed to pay $325,000 in attorneys' fees and expenses to fully resolve the claims brought forth in the class action and the demands for action. This settlement was reached after considering the costs and resources involved in continuing litigation.
The Court of Chancery of the State of Delaware ordered the closure of the action on September 10, 2024, with ABM Industries required to file an affidavit confirming the filing of the notice to the putative class as part of the current SEC report. This disclosure serves as notification to the class under Rule 23.
The company's decision to amend its bylaws and settle the legal actions underscores its commitment to corporate governance and shareholder rights. This resolution allows ABM Industries to avoid further litigation expenses and focus on its core business operations.
In other recent news, ABM Industries has outperformed expectations in its fiscal third-quarter report, leading to an upward revision of its full-year 2024 earnings per share (EPS) forecast.
The company's strong performance has prompted Truist Securities to raise its price target for ABM Industries from $49.00 to $55.00, while maintaining a Hold rating. Similarly, Baird has increased its price target from $49 to $56, keeping a Neutral rating, in response to the company's earnings beat and the subsequent increase in guidance.
ABM Industries has also been involved in a significant multi-year micro-grid project valued at $180 million, contributing to revenue growth in its Technical Solutions and Aviation segments by 25% and 13% respectively. Despite a challenging macroeconomic environment, particularly in sectors like office space, the company has managed to execute successfully.
In terms of future expectations, Truist Securities projects a modest EPS growth of about 5% for ABM Industries in the fiscal year 2025. ABM Industries has also raised its full-year adjusted EPS guidance to a range of $3.48 to $3.55, reflecting confidence in its continued growth trajectory. The company anticipates its normalized free cash flow to be near the higher end of the $240 million to $270 million range.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.