Transaction includes the sale of substantially all of its Aerostructure
and Industrial Products operations to Precision Castparts Corp. for
Transaction expected to close in the second quarter of this fiscal year
Héroux-Devtek to focus on its growth opportunities in its core Landing
Héroux-Devtek to evaluate options for the use of proceeds including a
significant distribution to shareholders
LONGUEUIL, QC, July 17, 2012 /CNW Telbec/ - Héroux-Devtek Inc. (TSX:
HRX), a leading Canadian manufacturer of aerospace products, today
announced that it has executed a definitive agreement for the sale of
substantially all of its Aerostructure and Industrial Products
operations to Precision Castparts Corp. (NYSE: PCP) for C$300 million
in cash, subject to post-closing adjustments. Héroux-Devtek expects to
realize net cash proceeds of approximately C$230 million from the sale,
after related taxes and expenses. Going forward, the Corporation will
focus on growth opportunities in its core Landing Gear operations,
leveraging its market-leading position in the sector.
The transaction, which has been unanimously approved by Héroux-Devtek's
Board of Directors, is expected to close in the second quarter of the
current fiscal year and is subject to customary regulatory approvals
and other approvals for this type of transaction. The transaction is
not subject to shareholders' approval.
Assets to be acquired by Precision Castparts Corp. include
Héroux-Devtek's Dorval (Quebec), Querétaro (Mexico) and Arlington
(Texas) Aerostructure manufacturing sites, as well as the Cincinnati
(Ohio) Industrial Products manufacturing sites. The assets to be sold
generated sales of approximately $130 million for the fiscal year ended
March 31, 2012.
Following the closing of the transaction in the second quarter of the
current fiscal year, the Corporation will retain all of its Landing
Gear design engineering and manufacturing capabilities that have
allowed it to set the industry standards on various platforms over the
years and will have more than 1,000 employees in Canada and the U.S.
The pro forma entity has revenues of more than $250 million.
Héroux-Devtek is currently evaluating various alternatives for the
anticipated proceeds, including a significant distribution to
shareholders and certain debt repayment.
"The sale of the Aerostructure and Industrial Products operations
represents an opportunity to crystallize substantial value for our
shareholders and allows Héroux-Devtek to focus on its core Landing Gear
operations", said Mr. Claude Boivin, Chair of the Corporation's Special Committee
which is overseeing the transaction. "We have evaluated and continue to evaluate attractive opportunities for
the Corporation and will consider the most effective and efficient
options for distribution and redeployment of proceeds from the
Mr. Gilles Labbé, President and CEO of Héroux-Devtek, said: "We believe this transaction generates significant value for our
shareholders. More importantly, we will continue to create value going
forward as a publicly-traded corporation through a combination of
organic growth and acquisition initiatives in the landing gear market,
as we leverage our core strengths and leading position. Several
exciting growth opportunities are available to Héroux-Devtek and our
stronger financial position following this transaction will position us
favourably to further expand our landing gear market penetration. Our
vision continues to build the Corporation into a Quebec-based,
world-class organization in this core market."
Mr. Labbé continued: "Precision Castparts is a worldwide, diversified manufacturer of complex
metal components and products. They are highly anticipating the
inclusion of the dedicated Héroux-Devtek Dorval, Arlington, Querétaro
and Cincinnati employees, who I warmly thank for contributing to our
success, into their business to continue executing their growth
strategy. As such, this is a "win-win" transaction for all parties
National Bank Financial Inc. acted as exclusive financial advisor to
Héroux-Devtek and the Special Committee. Fasken Martineau DuMoulin LLP
and Hogan Lovells LLP acted as legal counsel to Héroux-Devtek.
ABOUT HÉROUX-DEVTEK, INC.
Héroux-Devtek Inc. (TSX: HRX), a Canadian company, serves two main
market segments: Aerospace and Industrial Products, specializing in the
design, development, manufacture and repair and overhaul of related
systems and components. Héroux-Devtek Inc. supplies both the commercial
and military sectors of the Aerospace segment with landing gear systems
(including spare parts, repair and overhaul services) and airframe
structural components. The Corporation also supplies the industrial
segment with large components for power generation equipment and
precision components for other industrial applications. Approximately
70% of the Corporation's sales are outside Canada, mainly in the United
States. The Corporation's head office is located in Longueuil, Québec
with facilities in the Greater Montreal area (Longueuil, Dorval, Laval
and St-Hubert); Kitchener and Toronto, Ontario; Arlington, Texas;
Springfield, Cleveland and Cincinnati, Ohio, as well as Querétaro,
ABOUT PRECISION CASTPARTS CORP.
Precision Castparts Corp. is a worldwide, diversified manufacturer of
complex metal components and products. It serves the aerospace, power,
and general industrial markets. PCC is the market leader in
manufacturing large, complex structural investment castings, airfoil
castings, forged components, and highly engineered, critical fasteners
for aerospace applications. In addition, the Company is the leading
producer of airfoil castings for the industrial gas turbine market.
PCC manufactures extruded seamless pipe, fittings, forgings, and clad
products for power generation and oil & gas applications; commercial
and military airframe aerostructures; and metal alloys and other
materials to the casting and forging industries.
Except for historical information provided herein, this press release
may contain information and statements of a forward-looking nature
concerning the future performance of the Corporation. These statements
are based on suppositions and uncertainties as well as on management's
best possible evaluation of future events. Such factors may include,
without excluding other considerations, fluctuations in quarterly
results, evolution in customer demand for the Corporation's products
and services, the impact of price pressures exerted by competitors, and
general market trends or economic changes. As a result, readers are
advised that actual results may differ from expected results.
SOURCE HEROUX-DEVTEK INC.
For further information:
President and Chief Executive Officer
Tel.: (450) 679-3330
Executive Vice-President and Chief Financial Officer
Tel.: (450) 679-3330
Martin Goulet, CFA
Tel.: (514) 731-0000