Acquisition brings significant and immediate strategic benefits
CONFERENCE CALL AND PRESENTATION
Monday, February 3, 2014 at 9:00 AM, Eastern time
514-807-9895 (Montreal and overseas participants)
1-888-231-8191 (all other North American calls)
A presentation is also available at www.herouxdevtek.com
Please dial-in 15 minutes before the conference call begins. If you are unable to call-in at this time, you may access a tape recording of the meeting by calling 1-855-859-2056 and entering the passcode 58540052 on your phone. This tape recording will be available on Monday, February 3, 2014 as of 12:00 PM until 11:59 PM on Monday, February 10, 2014. Interested parties may also listen live at www.herouxdevtek.com or at www.newswire.ca.
LONGUEUIL, QC, Feb. 3, 2014 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), ("Héroux-Devtek" or the "Corporation"), a leading Canadian manufacturer of aerospace products, announces it has acquired the entire share capital of U.K.-based APPH Limited and U.S.-based APPH Wichita, Inc. (together "APPH"), subsidiaries of BBA Aviation Plc (LSE: BBA). APPH is an integrated provider of landing gear and hydraulic systems and assemblies for original equipment manufacturer ("OEM") and aftermarket applications.
Headquartered in Runcorn, United Kingdom, APPH specializes in the design, engineering, manufacturing and aftermarket support of landing gear and hydraulic systems and assemblies for fixed and rotary wing civil and military aircraft. Héroux-Devtek is acquiring four plants located in the United Kingdom and one plant in Wichita, Kansas. These plants have a combined workforce of approximately 400 employees, including a design engineering department staffed with 40 professionals. APPH's main design programs include landing gear systems for the Hawk, SAAB Gripen, AW101, C27J Spartan and EC175 aircraft.
For the 12-month period ended December 31, 2013, APPH generated revenues of approximately US$77 million and an adjusted EBITDA of approximately US$12.5 million. The purchase price, net of about US$4 million of cash acquired, is approximately US$124 million. The transaction is being financed with the Corporation's available cash and existing credit facilities.
On a pro forma basis, Héroux-Devtek's revenue mix is expected to be approximately 54% military and 46% commercial, with about 25% of sales originating from proprietary products and 75% from built-to-print activities. Furthermore, around 32% of sales should be derived from aftermarket products and services while 68% would be generated by OEMs.
"The acquisition of APPH brings significant and immediate strategic benefits to Héroux-Devtek, while strengthening its global competitive position and status as a leading landing gear system provider for aircraft weighing less than 100,000 pounds," said Gilles Labbé, President and Chief Executive Officer of Héroux-Devtek. "APPH expands our geographical footprint into the European market, provides us with significant content on several leading programs, further increases and diversifies our customer base, and provides greater exposure to the attractive aftermarket business. With a majority of its revenues coming from programs where it holds design authority rights on life-cycle mandates, APPH will also provide Héroux-Devtek with an increased proportion of proprietary programs compared to built-to-print activities. This acquisition will be accretive to earnings and will provide attractive synergy opportunities, thus building further value for our shareholders."
TD Securities acted as exclusive financial advisor to Héroux-Devtek and Lavery, de Billy LLP and Hogan Lovells International LLP acted as legal counsel to Héroux-Devtek.
Héroux-Devtek Inc. (TSX: HRX) is a Canadian company specializing in the design, development, manufacture and repair and overhaul of landing gear systems and components for the Aerospace market. The Corporation is the third largest landing gear company worldwide, supplying both the commercial and military sectors of the Aerospace market with new landing gear systems and components, as well as aftermarket products and services. The Corporation also manufactures electronic enclosures, heat exchangers and cabinets for suppliers of airborne radar, electro-optic systems and aircraft controls through its Magtron operations. On a pro forma basis, approximately 75% of the Corporation's sales are expected to be outside Canada, including 50% in the United States. The Corporation's head office is located in Longueuil, Québec with facilities in the Greater Montreal area (Longueuil, Laval and St-Hubert); Kitchener and Toronto, Ontario; Springfield and Cleveland, Ohio; Wichita, Kansas; and Runcorn, Nottingham and Bolton, United Kingdom.
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: Héroux-Devtek Inc.
For further information:
President and Chief Executive Officer
Tel.: (450) 679-3330
Martin Goulet, CFA
Tel.: (514) 731-0000