MONTREAL, Oct. 24, 2023 /PRNewswire/ - (NYSE: CAE)
(TSX: CAE) - CAE Inc. (CAE or the Company) today announced
that it has reached a definitive agreement to sell CAE's Healthcare
business to Chicago-based Madison
Industries for an enterprise value of C$311
million, subject to customary adjustments.
"We are proud of the significant contribution to patient safety
that CAE Healthcare has made," said Marc
Parent, President and CEO of CAE. "The business is growing
under a strong leadership team and has reached a point where the
opportunity exists to take it to the next level. We believe Madison
Industries is well positioned to support the future growth of the
Healthcare business, which will continue to focus on evolving
simulation to drive patient safety and quality outcomes."
"This decision to streamline our portfolio better positions CAE
to efficiently allocate capital and resources to secure the many
attractive growth opportunities on the horizon in our much larger,
core simulation and training markets," he continued.
"Madison Industries is on a mission to make the world safer,
healthier, and more productive," said Larry
Gies, Madison Industries' founder and Chief Executive
Officer. "Our platform is designed to empower companies whose
products make our lives better and build these companies into the
market leaders of tomorrow."
"At Madison, we are excited to expand upon the heritage of
innovation that CAE Healthcare has built," he continued. "With a
talented workforce in the United
States, Europe, and world
leading R&D capabilities in Quebec, we will look to rapidly accelerate and
progress simulation and quality outcomes with the most complete set
of clinical training tools available."
Closing of the transaction, which is subject to closing
conditions, including customary regulatory approvals, is expected
before the end of fiscal year 2024. Sale proceeds will be
principally used to accelerate deleveraging, as well as to support
CAE's continued focus on technology advancement, market
leadership and cost optimization within its core training and
simulation markets.
CAE has engaged National Bank Financial Inc. as its exclusive
financial advisor for this transaction.
About CAE
At CAE, we equip people in critical roles with the expertise and
solutions to create a safer world. As a technology company, we
digitalize the physical world, deploying software-based simulation
training and critical operations support solutions. Above all else,
we empower pilots, cabin crew, airlines, defence and security
forces and healthcare practitioners to perform at their best every
day and when the stakes are the highest. Around the globe, we're
everywhere customers need us to be with more than 13,000 employees
in approximately 250 sites and training locations in over 40
countries. CAE represents more than 75 years of industry firsts—the
highest-fidelity flight, mission and medical simulators and
training programs powered by digital technologies. We embed
sustainability in everything we do. Today and tomorrow, we'll make
sure our customers are ready for the moments that matter.
Read our FY23 Global Annual Activity and Sustainability
Report
Follow us on Twitter: @CAE_Inc
Facebook: www.facebook.com/cae.inc
LinkedIn: www.linkedin.com/company/cae
Hashtags: #CAE; #CAEpilot
Caution concerning forward-looking
statements
This press release includes forward-looking statements about
the sale by CAE of its Healthcare business (the Sale
Transaction), the anticipated benefits and expected impacts
therefrom on CAE's strategic and operational plans and financial
results, the expected terms, conditions (including receipt of
necessary regulatory approvals) and completion of the Sale
Transaction, the anticipated cash consideration therefrom and the
timing for completion thereof, as well as CAE's activities, events
and developments that it expects to or anticipates may occur in the
future including, for example, statements about CAE's vision,
strategies, market trends and outlook, future revenues, earnings,
cash flow growth, profit trends, growth capital spending,
expansions and new initiatives, financial obligations, available
liquidities, expected sales, our financial position, the expected
capital returns to shareholders, our business outlook, business
opportunities, objectives, development, plans, growth strategies
and other strategic priorities, and other statements that are not
historical facts. Since forward-looking statements and information
relate to future events or future performance and reflect current
expectations or beliefs regarding future events, they are typically
identified by words such as "anticipate", "believe", "could",
"estimate", "expect", "future", "intend", "likely", "may", "plan",
"seek", "should", "strategy", "will" or the negative thereof or
other variations thereon suggesting future outcomes or statements
regarding an outlook. By their nature, forward looking statements
require CAE to make assumptions and are subject to inherent risks
and uncertainties associated with CAE's business which may cause
actual results in future periods to differ materially from results
indicated in forward-looking statements. While these statements are
based on management's expectations and assumptions regarding
historical trends, current conditions and expected future
developments, as well as other factors that CAE believes are
reasonable and appropriate in the circumstances, readers are
cautioned not to place undue reliance on these forward-looking
statements as there is a risk that they may not be accurate. All
such statements constitute "forward-looking statements" within the
meaning of applicable Canadian securities legislation and
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995.
Important risks that could cause such differences include
risks relating to the Sale Transaction, such as all or part of the
intended benefits therefrom not being realized or unanticipated
carve out-related issues, costs or delays, failure to receive or
delay in receiving necessary regulatory approvals or otherwise
satisfy the conditions to the completion of the Sale Transaction or
delay in completing it and uncertainty regarding the length of time
required to complete the Sale Transaction, the impact of the
announcement of the Sale Transaction on CAE's relationships with
third parties, including commercial counterparties, suppliers,
employees and competitors, strategic relationships, operating
results and businesses generally, the occurrence of an event which
would allow the parties to terminate their obligations, commitments
and undertakings pursuant to the Sale Transaction documentation,
changes in the terms of the Sale Transaction, the failure by the
parties to fulfill their obligations, commitments and undertakings
pursuant to the Sale Transaction documentation, and the failure to
retain our key management, personnel and clients during the
pendency and following completion of the Sale Transaction and risks
associated with the loss and replacement of key management and
personnel. If the proposed Sale Transaction is not completed for
any reason, there is a risk that the announcement of such Sale
Transaction and the dedication of substantial resources of CAE to
the completion thereof could have a negative impact on our
operating results and business generally, and could have a material
adverse effect on our current and future operations, financial
condition and prospects, including the loss of investor confidence
in connection with our ability to execute our strategic plan. In
addition, failure to complete the proposed Sale Transaction for any
reason could materially negatively impact the market price of our
securities and there can be no assurance that management will be
successful in its efforts to identify and implement other strategic
alternatives that would be in the best interests of CAE and its
stakeholders within the context of existing market, regulatory and
competitive conditions in the industries in which we operate, on
favourable terms and timing or at all, and, if implemented, that
such actions would have the planned results. We also have incurred
significant transaction and related costs in connection with the
proposed Sale Transaction, and additional significant or
unanticipated costs may be incurred.
Additional risks that could cause such differences
include, but are not limited to, risks relating to cybersecurity,
geopolitical uncertainty, global economic conditions, competitive
business environment, original equipment manufacturer (OEM)
leverage and encroachment, inflation, international scope of CAE's
business, level and timing of defence spending, civil aviation
industry, CAE's ability to penetrate new markets, research and
development activities, evolving standards and technology
innovation and disruption, length of sales cycle, business
development and awarding of new contracts, strategic partnerships
and long-term contracts, CAE cannot assure investors that it will
effectively manage its growth, estimates of market opportunity,
competing priorities, supply chain disruptions, program management
and execution, mergers and acquisitions, business continuity,
subcontractors, fixed price and long-term supply contracts,
continued reliance on certain parties and information, talent
management, key personnel and management, corporate culture, labour
relations, availability of capital, customer credit risk, foreign
exchange, effectiveness of internal controls over financial
reporting, liquidity risk, interest rates, returns to shareholders,
estimates used in accounting, impairment risk, pension plans,
indebtedness, acquisition and integration costs, sales of
additional common shares, market price and volatility of CAE's
common shares, seasonality, taxation matters, adjusted backlog,
data rights and governance, U.S. foreign ownership, control or
influence mitigation measures, compliance with laws and
regulations, insurance coverage potential gaps, product-related
liabilities, environmental laws and regulations, government audits
and investigations, protection of CAE's intellectual property and
brand, third-party intellectual property, foreign private issuer
status, enforceability of civil liabilities against CAE's directors
and officers, extreme climate events and the impact of natural or
other disasters (including effects of climate change), more acute
scrutiny and perception gaps regarding environmental, social and
governance matters, reputational risk, information technology and
reliance on third-party providers for information technology
systems and infrastructure management. Additionally, differences
could arise because of events announced or completed after the date
of this press release. More information about the risks and
uncertainties affecting CAE's business can be found in the
Management's Discussion & Analysis for the year ended
March 31, 2023 and the Management's
Discussion & Analysis for the quarter ended June 30, 2023. Accordingly, readers are cautioned
that any of the disclosed risks could have a material adverse
effect on CAE's forward-looking statements. Readers are also
cautioned that the risks described above and elsewhere in this
press release, and in the documents referenced herein, are not
necessarily the only ones CAE faces; additional risks and
uncertainties that are presently unknown to CAE or that CAE may
currently deem immaterial may adversely affect CAE's
business.
Except as required by law, CAE disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
The forward-looking information and statements contained in this
press release are expressly qualified by this cautionary
statement. In addition, statements that "we believe" and
similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based on information available to us
as of the date of this press release. While we believe that
information provides a reasonable basis for these statements, that
information may be limited or incomplete. Our statements should not
be read to indicate that we have conducted an exhaustive inquiry
into, or review of, all relevant information. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements.
Material Assumptions
The forward-looking statements set out in this press release
are based on certain assumptions including, without limitation: the
satisfaction of all closing conditions of the Sale Transaction,
including receipt of all necessary regulatory approvals and other
consents and approvals in a timely manner and on terms acceptable
to CAE, our ability to otherwise complete the Sale
Transaction within anticipated time periods and at expected cost
levels, management's estimates and expectations in relation to
future economic and business conditions and other factors in
relation to the Sale Transaction, the realization of the expected
strategic, financial and other benefits of the Sale Transaction in
the timeframe anticipated (including receipt of expected proceeds
and intended use thereof), fulfillment by the other parties of
their respective obligations, commitments and undertakings pursuant
to the Sale Transaction documentation, prevailing market
conditions, and no material financial, operational or competitive
consequences of changes in regulations affecting CAE's business.
For additional information, including with respect to other
assumptions underlying the forward-looking statements made in this
press release, refer to the applicable reportable segment in the
Management's Discussion & Analysis for the year ended
June 30, 2023 and the Management's
Discussion & Analysis for the quarter ended June 30,
2023. Accordingly, the assumptions outlined in this press release,
and in the documents referenced herein, and, consequently, the
forward-looking statements based on such assumptions, may turn out
to be inaccurate.
Contacts:
General Media:
Samantha
Golinski, Vice President, Public Affairs & Global
Communications
+1-514-341-2000, ext. 7939, samantha.golinski@cae.com
Investor Relations:
Andrew Arnovitz, Senior Vice
President, Investor Relations and Enterprise Risk Management
+1-514-734-5760, andrew.arnovitz@cae.com
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SOURCE CAE Inc.