WICHITA, Kan., May 2, 2018 /CNW/ -- Spirit AeroSystems Holdings,
Inc. (NYSE: SPR) today announced a definitive agreement to acquire
S.R.I.F. N.V., the parent company of Asco Industries, N.V. (Asco),
for $650 million in cash, subject to
customary closing adjustments, including foreign currency
adjustments. Asco is a leading supplier of high lift wing
structures, mechanical assemblies and major functional components
to major OEMs and Tier-1 suppliers in the global commercial
aerospace and military markets. Spirit expects to finance the
acquisition through new debt.
"Asco is a compelling fit for Spirit that aligns extremely well
with the strategic priorities we have been communicating.
Specifically, it expands our Airbus content on A320 and A350 wings,
adds new defense content on the F-35 and broadens our commercial
capabilities to help grow our fabrication business," said Spirit
President and CEO Tom Gentile. "We
are pleased to acquire a business of this scale that has such an
outstanding reputation with its customers dating back to 1954 and a
strong management team led by CEO Christian
Boas, who will remain with the business following the
closing."
"Throughout Asco's history, we have been committed to delivering
innovative and value-added products for our customers," said
Christian Boas, CEO of Asco. "This
transaction with Spirit represents an excellent outcome for Asco
and as we become part of a larger, global enterprise with greater
combined expertise and resources, we will be even better positioned
to do that. We are confident this combination will deliver
long-term benefits to our customers and we look forward to joining
Spirit as we embark on the next chapter in our company's
history."
Asco employs approximately 1,400 people across four
manufacturing sites comprising over 1.5 million square feet
including: Vancouver and
Stillwater, Oklahoma in
North America, Gedern,
Germany, and its headquarters in
Zaventem, Belgium, in
Europe. These are concentrated highly automated
state-of-the-art facilities with available capacity to support rate
increases and future growth. Asco has well-established customer
relationships in its markets with high-value single-source
products, including leading and trailing edge wing devices such as
slat tracks and flap supports, structural parts and
assemblies. Representative commercial aerospace programs
include A320, A350 XWB, A380, 737, 787, C-Series and E2.
Representative military programs include F-35, A400M, and
KC-390.
Asco revenues are anticipated to be approximately $400 million in 2018. "We expect to realize
attractive cost synergies from the acquisition; the expected return
on investment exceeds our internal threshold and the post-synergy
EBITDA multiple* is under 8x," said Gentile. Spirit estimates the
acquisition will be accretive to adjusted non-GAAP earnings per
share in the first full year after closing.
The transaction, which is expected to close in the second half
of 2018, is subject to regulatory approvals and customary closing
conditions.
* EBITDA is a non-GAAP measure defined as earnings before
interest, taxes, depreciation and amortization. The Company has
chosen to present an estimated post-synergy EBITDA multiple related
to the purchase price of Asco in order to provide investors with
additional useful information. The Company considers EBITDA to be
an important measure used to evaluate operating performance, and
the measure is frequently used by securities analysts, investors
and other interested parties in the evaluation of companies in the
industry, but this figure should not be considered in
isolation.
Methuselah Advisors and Goldman Sachs & Co. LLC served as
financial advisors, and Sullivan & Cromwell LLP and Stibbe
served as legal advisors to Spirit. Lazard served as sole financial
advisor to the sellers, and Eubelius and Gibson Dunn & Crutcher
LLP served as legal advisors to the sellers.
About Spirit AeroSystems
Spirit AeroSystems designs and builds aerostructures for both
commercial and defense customers. With headquarters
in Wichita, Kansas, Spirit
operates sites in the U.S.,
U.K., France and Malaysia. The company's core
products include fuselages, pylons, nacelles and wing components
for the world's premier aircraft. Spirit AeroSystems focuses
on affordable, innovative composite and aluminum
manufacturing solutions to support customers around the globe. More
information is available at www.spiritaero.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" that
may involve many risks and uncertainties. Forward-looking
statements reflect our current expectations or forecasts of future
events. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "aim," "anticipate,"
"believe," "could," "continue," "estimate," "expect," "goal,"
"forecast," "intend," "may," "might," "objective," "outlook,"
"plan," "predict," "project," "should," "target," "will," "would,"
and other similar words, or phrases, or the negative thereof,
unless the context requires otherwise. These statements reflect
management's current views with respect to future events and are
subject to risks and uncertainties, both known and unknown. Our
actual results may vary materially from those anticipated in
forward-looking statements. We caution investors not to place undue
reliance on any forward-looking statements. Important factors that
could cause actual results to differ materially from those
reflected in such forward-looking statements and that should be
considered in evaluating our outlook include, but are not limited
to, the following: 1) our ability to continue to grow our
business and execute our growth strategy, including the timing,
execution, and profitability of new and maturing programs; 2)
our ability to perform our obligations under our new and
maturing commercial, business aircraft, and military development
programs, and the related recurring production; 3) our ability
to accurately estimate and manage performance, cost, and revenue
under our contracts, including our ability to achieve certain cost
reductions with respect to the B787 program; 4) margin
pressures and the potential for additional forward losses on new
and maturing programs; 5) our ability to accommodate, and the
cost of accommodating, announced increases in the build rates of
certain aircraft; 6) the effect on aircraft demand and build
rates of changing customer preferences for business aircraft,
including the effect of global economic conditions on the business
aircraft market and expanding conflicts or political unrest in the
Middle East or Asia; 7) customer cancellations or
deferrals as a result of global economic uncertainty or otherwise;
8) the effect of economic conditions in the industries and
markets in which we operate in the U.S. and globally and any
changes therein, including fluctuations in foreign currency
exchange rates; 9) the success and timely execution of key
milestones such as the receipt of necessary regulatory approvals,
including our ability to obtain in a timely fashion any required
regulatory or other third party approvals for the consummation of
our announced acquisition of Asco, and customer adherence to their
announced schedules; 10) our ability to successfully
negotiate, or re-negotiate, future pricing under our supply
agreements with Boeing and our other customers; 11) our
ability to enter into profitable supply arrangements with
additional customers; 12) the ability of all parties to
satisfy their performance requirements under existing supply
contracts with our two major customers, Boeing and Airbus, and
other customers, and the risk of nonpayment by such customers;
13) any adverse impact on Boeing's and Airbus' production of
aircraft resulting from cancellations, deferrals, or reduced orders
by their customers or from labor disputes, domestic or
international hostilities, or acts of terrorism; 14) any
adverse impact on the demand for air travel or our operations from
the outbreak of diseases or epidemic or pandemic outbreaks;
15) our ability to avoid or recover from cyber-based or other
security attacks, information technology failures, or other
disruptions; 16) returns on pension plan assets and the impact
of future discount rate changes on pension obligations;
17) our ability to borrow additional funds or refinance debt,
including our ability to obtain the debt to finance the purchase
price for our announced acquisition of Asco on favorable terms or
at all; 18) competition from commercial aerospace original
equipment manufacturers and other aerostructures suppliers;
19) the effect of governmental laws, such as U.S. export
control laws and U.S. and foreign anti-bribery laws such as the
Foreign Corrupt Practices Act and the United Kingdom Bribery Act,
and environmental laws and agency regulations, both in the U.S. and
abroad; 20) the effect of changes in tax law, such as the
effect of The Tax Cuts and Jobs Act (the "TCJA") that was enacted
on December 22, 2017, and changes to
the interpretations of or guidance related thereto, and the
Company's ability to accurately calculate and estimate the effect
of such changes; 21) any reduction in our credit ratings;
22) our dependence on our suppliers, as well as the cost and
availability of raw materials and purchased components;
23) our ability to recruit and retain a critical mass of
highly-skilled employees and our relationships with the unions
representing many of our employees; 24) spending by the U.S.
and other governments on defense; 25) the possibility that our
cash flows and our credit facility may not be adequate for our
additional capital needs or for payment of interest on, and
principal of, our indebtedness; 26) our exposure under our
revolving credit facility to higher interest payments should
interest rates increase substantially; 27) the effectiveness
of any interest rate hedging programs; 28) the effectiveness
of our internal control over financial reporting; 29) the
outcome or impact of ongoing or future litigation, claims, and
regulatory actions; 30) exposure to potential product
liability and warranty claims; 31) our ability to effectively
assess, manage and integrate acquisitions that we pursue, including
our ability to successfully integrate the Asco business and
generate synergies and other cost savings; 32) our ability to
consummate our announced acquisition of Asco in a timely matter
while avoiding any unexpected costs, charges, expenses, adverse
changes to business relationships and other business disruptions
for ourselves and Asco as a result of the acquisition; 33) our
ability to continue selling certain receivables through our
supplier financing program; 34) the risks of doing business
internationally, including fluctuations in foreign current exchange
rates, impositions of tariffs or embargoes, compliance with foreign
laws, and domestic and foreign government policies; and 35) our
ability to complete the proposed accelerated stock repurchase plan,
among other things. These factors are not exhaustive and it is not
possible for us to predict all factors that could cause actual
results to differ materially from those reflected in our
forward-looking statements. These factors speak only as of the date
hereof, and new factors may emerge or changes to the foregoing
factors may occur that could impact our business. As with any
projection or forecast, these statements are inherently susceptible
to uncertainty and changes in circumstances. Except to the extent
required by law, we undertake no obligation to, and expressly
disclaim any obligation to, publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise. Additional information concerning
these and other factors can be found in our filings with the
Securities and Exchange Commission, including our most recent
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
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SOURCE Spirit AeroSystems