CAE concludes acquisition of Bombardier’s Business Aircraft Training business
March 14 2019 - 6:00AM
(NYSE: CAE; TSX: CAE) – CAE confirmed today that it has concluded
the previously announced acquisition of Bombardier’s Business
Aircraft Training (BAT) business for an enterprise value of US$645
million. All the required conditions for closing have been met.
The acquisition of Bombardier’s flight and
technical training operations expands CAE’s ability to address the
training market for customers operating Bombardier business jets,
which at more than 4,800 aircraft, is one of the largest and most
valuable in-service fleets of business aircraft in the world. The
acquisition also serves to expand CAE’s position in the largest and
fastest growing segment of the business aviation training market,
involving medium- and large-cabin business jets. It provides CAE
with talented people, a loyal customer base, and an established
recurring training business which is highly complementary to CAE’s
network. The Bombardier BAT business includes a modern fleet of
full-flight simulators and training devices covering the Bombardier
Learjet, Challenger and Global product lines, including the latest
large cabin Global 5500, 6500 and 7500 business jets. “We are
pleased to welcome Bombardier customers and employees to CAE,” said
Marc Parent, CAE’s President and CEO. “Bombardier business jet
customers will have access to a seamless training experience in our
global network of training centres, providing the most advanced
training solutions on the market by leveraging our continued
investments in training.” With this agreement, CAE will be adding
12 Bombardier business aviation full-flight simulators located in
Dallas and Montreal to its training network (including one
deployment already planned for CAE’s fiscal year 2021), for a total
of 29 Bombardier business aviation full-flight simulators available
for training worldwide, with further growth planned in the near- to
mid-term. The acquisition, which was first announced on November 8,
2018, is expected to provide high single-digit EPS accretion for
CAE within its first full year and to be free cash flow(1)
accretive as well. CAE also concluded the issuance of term loans
and US$450 million of the US$550 million of senior unsecured notes
that were announced on December 21, 2018. The remaining balance of
US$100 million of senior unsecured notes will be drawn for the
refinancing of existing debt in December 2019. TD Securities acted
as exclusive financial advisor to CAE. About
CAECAE is a global leader in training for the civil
aviation, defence and security, and healthcare markets. Backed by a
record of more than 70 years of industry firsts, we continue to
help define global training standards with our innovative
virtual-to-live training solutions to make flying safer, maintain
defence force readiness and enhance patient safety. We have the
broadest global presence in the industry, with over 9,000
employees, 160 sites and training locations in over 35 countries.
Each year, we train more than 220,000 civil and defence
crewmembers, including more than 135,000 pilots, and thousands of
healthcare professionals worldwide. www.cae.comFollow us on
Twitter: CAE_Inc *Bombardier, Learjet, Challenger, Global, Global
5500, Global 6500 and Global 7500 are registered or
unregistered trademarks of Bombardier Inc. or its subsidiaries.
Cautionary note regarding forward-looking
statements
This news release may contain forward-looking
statements and information within the meaning of applicable
Canadian securities laws and of the United States Private
Securities Litigation Reform Act of 1995, including, without
limitation, as it relates to the acquired Bombardier BAT business
as referenced herein as well as certain expectations with respect
to the same. Forward-looking statements describe future
expectations, plans, results or strategies and can often be
identified by the use of words such as “may,” “will,” “intend,”
“believe,” “expect,” “anticipate,” and similar references which are
intended to identify forward-looking statements. Statements in this
news release, other than statements of historical fact, are
forward-looking and are subject to important risks, uncertainties
and assumptions. The results or events predicted in these
forward-looking statements may differ materially from actual
results or events. These statements do not reflect the potential
impact of any non-recurring or other special items or events that
are announced or completed after the date of this news release,
including mergers, acquisitions, or other business combinations and
divestitures. Specific risks and uncertainties relating to the
transaction described in this news release include, but are not
limited to: potential adverse reactions or changes to business
relationships resulting from the completion of the announced
acquisition; the potential impact of unforeseen liabilities on the
future prospects, business and management strategies for the
management, expansion and growth of our operations after the
consummation of the announced acquisition; the risks relating to
long-term contracts; the risks and costs associated with, and our
ability to, integrate Bombardier’s BAT business successfully and to
realize revenue and achieve anticipated synergies; and management’s
response to any of the aforementioned factors. You will find more
information about the risks and uncertainties associated with our
business in the MD&A section of our annual report and annual
information form for the year ended March 31, 2018. These documents
have been filed with the Canadian securities regulatory authorities
and are available on our website (www.cae.com), on SEDAR
(www.sedar.com) and a free copy is available upon request to CAE.
They have also been filed with the U.S. Securities and Exchange
Commission under Form 40-F and are available on EDGAR
(www.sec.gov). The forward-looking statements contained in this
news release represent our expectations as of the date of this news
release and, accordingly, are subject to change after this date. We
do not update or revise forward-looking information even if new
information becomes available unless legislation requires us to do
so. You should not place undue reliance on forward-looking
statements. Non-GAAP and Other Financial Measures This news release
references certain non-GAAP and other financial measures.
Management believes these non-GAAP financial measures will provide
investors with useful supplemental information about the financial
performance of our business and the acquired business. Non-GAAP
measures are useful supplemental information but may not have a
standardized meaning according to GAAP. These measures should not
be confused with, or used as an alternative for, performance
measures calculated according to GAAP. They should also not be used
to compare with similar measures from other companies. Management
believes that providing certain non-GAAP measures provides users
with a better understanding of our results and trends and provides
additional information on our financial and operating performance.
(1) Free cash flow: Free cash flow is a non-GAAP measure we use as
an indicator of our financial strength and liquidity. We calculate
it by taking the net cash generated by continuing operating
activities, less maintenance capital expenditures, investment in
other assets not related to growth and dividends paid, plus
proceeds from the disposal of property, plant and equipment,
dividends received from equity accounted investees and proceeds,
net of payments, from equity accounted investees.
CAE contacts: General Media:
Hélène V. Gagnon, Vice President, Public Affairs and Global
Communications, +1-514-340-5536, helene.v.gagnon@cae.com
Investor relations: Andrew Arnovitz, Vice
President, Strategy and Investor Relations, +1-514-734-5760,
andrew.arnovitz@cae.com Trade Media:Frédéric
Morais, Director, Marketing & Strategy, Civil Aviation Training
Solutions,+1-514-506-8331, frederic.morais@cae.com
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