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Héroux-Devtek Inc., (“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. 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, Kan. 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 Dec. 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 per cent per cent military and 46 per cent commercial, with about 25 per cent of sales originating from proprietary products and 75 per cent from built-to-print activities. Furthermore, around 32 per cent of sales should be derived from aftermarket products and services while 68 per cent 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.
