Bombardier to sell aerostructures business to Spirit
Bombardier today announced a definitive agreement to sell its aerostructures business to Spirit AeroSystems Holding, Inc. (Spirit) - which includes its facilities in Northern Ireland - supporting Bombardiers strategic decision to focus on its two strong growth pillars, trains and business aircraft.
Above:
Bombardier's
facilities in Northern Ireland at night.
Courtesy Bombardier
With this transaction, Spirit will acquire Bombardier’s aerostructures activities and aftermarket services operations in Belfast, UK; Casablanca, Morocco; and its aerostructures maintenance, repair and overhaul (MRO) facility in Dallas, US for a cash consideration of $500 million and the assumption of liabilities with a total carrying value in excess of $700(2) million, including government refundable advances and pension obligations.
Following the transaction, Spirit will continue to supply structural aircraft components and spare parts to support the production and in-service fleet of Bombardier Aviation’s Learjet, Challenger and Global families of aircraft.
2019 revenues for these activities are expected to be approximately $1.0 billion(3) , while generating adjusted EBITDA margin of approximately 12%. On this basis, the transaction implies an enterprise value to EBITDA multiple of approximately 10x.
The transaction follows the formation of Bombardier Aviation earlier this year and streamlines Bombardier’s aerostructures footprint to focus on core capabilities in Montreal, Mexico and its Global 7500 wing operations in Texas. The transaction also further strengthens Bombardier’s liquidity as it moves toward the deleveraging phase of the turnaround. The transaction is expected to close in the first half of 2020 and remains subject to regulatory approvals and customary closing conditions.
“This transaction represents another strategic milestone in the reshaping of our portfolio to focus on our strong business aircraft and rail franchises,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. “We are confident that Spirit’s acquisition of these aerostructures assets is the best outcome for customers, employees and shareholders, and we are committed to ensuring a smooth and orderly transition.”
In a statement, ADS Chief Executive Paul Everitt said: “The sale of Bombardier’s Northern Ireland facility announced today is welcome news for the highly skilled workforce in Belfast, the successful aerospace sector in Northern Ireland and the whole UK aerospace industry.
“Spirit AeroSystems is one of the largest aerostructures business in the world, and this deal sees them significantly expand their operations in the UK, while also opening up new opportunities for the Belfast facility to grow its business with the US and elsewhere.
“With the future of the operations assured, the exceptional workforce at the Belfast facility will now be able to continue to use their world-class expertise and skills as an integral part of the aerospace industry. We look forward to working closely with Spirit as they continue to grow their UK footprint.”