LONGUEUIL, QC, Aug. 31, 2012 /CNW Telbec/ - Héroux-Devtek Inc. (TSX: HRX), a leading Canadian manufacturer of aerospace products, today announced that it has completed the sale of substantially all of its Aerostructure and Industrial Products operations to Precision Castparts Corp. (NYSE:PCP). Unless otherwise indicated, all amounts are in Canadian dollars.
The transaction is for a cash consideration of $300.0 million, subject to post-closing adjustments. Assets 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 sold generated sales of $126.8 million for the fiscal year ended March 31, 2012.
Héroux-Devtek retains all of its Landing Gear product line as well as the Toronto-based Magtron operations. Going forward, the Corporation will focus on growth opportunities in its core Landing Gear operations, leveraging its market-leading position in the sector, including the strength of its design engineering and manufacturing capabilities that have allowed it to set the industry standards on various platforms over the years. Retained operations have more than 1,000 employees in Canada and the United States and generated consolidated sales of $253.5 million for the fiscal year ended March 31, 2012.
Héroux-Devtek expects to realize net cash proceeds of approximately $230.0 million from the sale, after related taxes and expenses. The Corporation is currently evaluating various alternatives for the use of net proceeds, including a distribution to shareholders and certain debt repayment. Net proceeds will also be used for the repayment of finance lease obligations of businesses sold, which represented an amount of $16.8 million as at June 30, 2012. The anticipated debt repayment could also include a partial repayment of about $39.0 million mainly against the Banks' credit facility. On that basis, the Corporation should have a cash and cash equivalent position of approximately $235.0 million on a pro forma basis.
ABOUT HÉROUX-DEVTEK, INC.
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 is the world, 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. 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, Laval and St-Hubert); Kitchener and Toronto, Ontario; as well as Springfield and Cleveland, Ohio.
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