20th Dec 2007 07:01
Senior PLC20 December 2007 Senior plc acquires Capo Industries, Inc. Senior plc ("Senior") is pleased to announce that it has acquired 100% of theissued share capital of Capo Industries, Inc. ("Capo" or the "Company"), for acash consideration of US$ 85.0m (£41.9m (1)), less the amount of any outstandingindebtedness of Capo upon completion of the acquisition. The Board intends tofund the transaction through the utilisation of existing debt facilities and anew £20m short-term facility. In addition, Senior will assume approximately $3.0m of tax liabilities of theSellers which arise as a result of the disposal of the Company to Senior.Further consideration of up to US$ 5.0m (£2.5m (1)), is payable in 2009conditional upon the actual results of 2008. Completion of the acquisition is subject to a number of conditions, includingthat related to the US Hart Scott Rodino Antitrust Improvements Act 1976, andcompletion is expected to occur towards the end of January 2008. The acquisition is expected to be immediately earnings enhancing. Capo, which is located in Chino near Los Angeles in California, USA waspurchased by its current owners, David Feltch (the President and CEO) and hiswife, in 1989. It is a leading manufacturer of highly engineered, complexsuper-alloy components primarily for the aero-engine market. The Companyprovides flight-critical components for propulsion and auxiliary power unit(APU) aero-engines for growing established and new programmes such as the Boeing737, 777 and 787, the Airbus 320 and 380, the military Joint Strike Fighteraircraft and an array of business jets such as General Dynamics' Gulfstream,Bombardier's Challenger and Dassault's Falcon. Capo focuses on complex, high value-added components including intermediatecases, engine yoke assemblies, diffusers, turbine nozzles, low pressure turbinecases, combustor cases, bearing housings and turbine shafts. These parts aretypically made of premium metals such as titanium, inconel and othersuper-alloys. The Company's largest customers include Honeywell and HamiltonSundstrand. The Company has a strong management team, led by Dave Feltch, all of whom arestaying with the business following its acquisition by Senior. For the year to 31 December 2007, Capo is forecasting sales of US$ 35.5m (£17.5m(1)) and pro-forma(2) profit before interest and tax of US$ 8.9m (£4.4m(1)). Asat 31 December 2006 gross assets were US$ 20.6m (£10.1m(1)). Sales for the yearended 31 December 2006 were US$ 29.3m and pro-forma profit before interest andtax was US$ 6.9m. The acquisition of Capo is in line with Senior's strategic objective to expandits aerospace presence and capability and the Board of Senior believe that theacquisition of Capo offers many benefits and opportunities including: • The acquisition of a well established, profitable business with strong growth prospects; • An immediate enhancement to Group earnings per share; • An increased presence in the buoyant commercial wide-bodied and business jet markets; • An increased presence at a number of market leading customers; • A stand alone business with an exceptional management team; • The benefit of additional Group sales and profits with minimal increase in central and divisional costs. Commenting on the acquisition, Graham Menzies, Senior's Group Chief Executive,said: "The acquisition of Capo, a very well invested and growing business, furtherenhances the Group's aerospace presence and capabilities and I am delighted towelcome Dave and all the Capo employees to our Group. The addition of Capomeans that the Group is even better placed for the future." Notes (1) The exchange rate used for the above £ sterling equivalents is $2.03 : £1. (2) Proforma profit before interest and tax is the reported profit before interest and tax of the Company after making adjustments for the exceptional costs incurred by the shareholders over and above that normally associated with the costs of such management positions. For further information please contact:Graham Menzies, Group Chief Executive, Senior plc 01923 714702Mark Rollins, Group Finance Director, Senior plc 01923 714738Adrian Howard, Finsbury Group 020 7251 3801 This announcement, together with other information on Senior plc may be found at: www.seniorplc.com Note to Editors: Senior is an international manufacturing group with operations in elevencountries. Senior designs, manufactures and markets high technology componentsand systems for the principal original equipment producers in the worldwidecivil aerospace, defence, diesel engine, exhaust system and energy markets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Senior