(NYSE: CAE; TSX: CAE) - CAE today announced that it has acquired
all the issued and outstanding shares of Flight Simulation Company
B.V. (FSC) for a cash consideration of approximately €70 million
(approximately C$108 million) paid to the sellers, calculated on
the basis of an enterprise value of €100 million (approximately
C$155 million).
The acquisition expands CAE’s ability to address
the training market for customers operating in Europe, including
airline and cargo operators. It provides CAE with an expanded
portfolio of customers and an established recurring training
business which is highly complementary to CAE’s network. FSC is
based in Amsterdam and includes a modern fleet of mainly CAE-built
full-flight simulators (FFSs) and training devices, comprised of
nine narrow body B737 and A320 FFSs, two widebody aircraft FFSs and
one regional jet. This acquisition is consistent with CAE’s
internal acquisition criteria and capital allocation priorities,
similar to its other recent bolt-on acquisitions, and is expected
to be accretive to earnings in its first full year.
“CAE is well positioned in the current
environment, with access to bolstered capital resources, to enhance
its market presence with selective, value-based acquisitions within
its core. The acquisition of FSC will allow CAE to better support
its customers and expand its addressable market,” said Marc Parent,
CAE’s President and Chief Executive Officer.
About Flight Simulation Company
FSC was founded in 2005 and is based in Amsterdam, in proximity to
Schiphol Airport. It provides total training solutions as well as
instructor provisioning. It operates out of a 12-bay facility
equipped with Airbus A320, Boeing B737, Boeing B747, Boeing B787
and Embraer E190 full-flight simulators. www.fsctraining.com
About CAECAE is a high
technology company, at the leading edge of digital immersion,
providing solutions to make the world a safer place. Backed by a
record of more than 70 years of industry firsts, we continue to
reimagine the customer experience and revolutionize training and
operational support solutions in civil aviation, defence and
security, and healthcare. We are the partner of choice to customers
worldwide who operate in complex, high-stakes and largely regulated
environments, where successful outcomes are critical. As a
testament to our customers’ ongoing needs for our solutions, over
60 percent of CAE’s revenue is recurring in nature. We have the
broadest global presence in our industry, with approximately 10,000
employees, 160 sites and training locations in over 35
countries. www.cae.com
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Caution concerning forward-looking
statements This press release includes forward-looking
statements about the anticipated benefits of the acquisition by CAE
(the Corporation) of FSC (the Acquisition), the Corporation’s
access to capital resources, and the Corporation’s activities,
events and developments that the Corporation expects to or
anticipates may occur in the future including, for example,
statements about the Corporation’s vision, strategies, market
trends and outlook, future revenues, capital spending, expansions
and new initiatives, financial obligations and expected sales.
Forward-looking statements normally contain words like “believe”,
“expect”, “anticipate”, “plan”, “intend”, “continue”, “estimate”,
“may”, “will”, “should”, “strategy”, “future” and similar
expressions. By their nature, forward looking statements require
the Corporation to make assumptions and are subject to inherent
risks and uncertainties associated with the Corporation’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 the
Corporation 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.
Important risks that could cause such
differences include, but are not limited to, the failure to gain
access to expected capital resources within anticipated timeframes
or at all, risks relating to the Acquisition, such as all or part
of the intended benefits therefrom not being realized or
unanticipated integration-related issues, costs or delays, risks
relating to the COVID-19 pandemic such as health and safety,
reduction and suspension of operations, global economic conditions,
diversions of management attention, heightened IT risks, liquidity
risks and credit risks, risks relating to the industry such as
competition, business development and awarding of new contracts,
level and timing of defence spending, government-funded defence and
security programs, constraints within the civil aviation industry,
regulatory matters, natural or other disasters, environmental laws
and regulations, climate change, risks relating to CAE such as
evolving standards and technology innovation, the Corporation’s
ability to penetrate new markets, R&D activities, fixed-price
and long term supply contracts, strategic partnerships and
long-term contracts, procurement and original equipment
manufacturer (OEM) leverage, product integration and program
management, protection of the Corporation’s intellectual property
and brand, third-party intellectual property, loss of key
personnel, labour relations, liability risks that may not be
covered by indemnity or insurance, warranty or other
product-related claims, integration of acquired businesses through
mergers, acquisitions, joint ventures, strategic alliances or
divestitures, reputational risk, U.S. foreign ownership, control or
influence mitigation measures, length of sales cycle, seasonality,
continued returns to shareholders, information technology and
cybersecurity, the Corporation’s reliance on technology and third
party providers, data privacy, and risks relating to the market
such as foreign exchange, availability of capital, credit risk,
pension plan funding, doing business in foreign countries,
geopolitical uncertainty, anti-corruption laws and taxation
matters. 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, 2020 and the Management’s Discussion
& Analysis for the quarter ended September 30, 2020. Any one or
more of the factors described above and elsewhere in this press
release, and in the documents referenced herein, may be exacerbated
by the continuing COVID-19 pandemic and may have a more negative
impact on CAE’s business, results of operations and financial
condition. 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
the Corporation faces; additional risks and uncertainties that are
presently unknown to the Corporation or that the Corporation may
currently deem immaterial may adversely affect CAE’s business.
Except as required by law, the Corporation
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.
Material AssumptionsThe
forward-looking statements set out in this press release are based
on certain assumptions including, without limitation: access to
expected capital resources within anticipated timeframes, the
integration and the realization of the anticipated benefits and
synergies of the Acquisition in the timeframe anticipated, the
anticipated negative impacts of the COVID-19 pandemic on the
Corporation’s businesses, operating results, cash flows and/or
financial condition, including the intended effect of mitigation
measures implemented as a result of the COVID-19 pandemic, CAE’s
available liquidity from cash and cash equivalents, undrawn amounts
on CAE’s revolving credit facilities, the balance available under
CAE’s receivable purchase program, CAE’s cash flows from operations
and continued access to debt funding will be sufficient to meet
financial requirements in the foreseeable future; 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 March 31, 2020 and the Management’s
Discussion & Analysis for the quarter ended September 30, 2020.
Given the impact of the changing circumstances surrounding the
COVID-19 pandemic and the related response from CAE, governments,
regulatory authorities, businesses and customers, there is
inherently more uncertainty associated with CAE’s assumptions.
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.
CAE has filed a registration statement
(including a prospectus) with the SEC relating to an offering of
its common shares. Before you invest, you should read the
prospectus supplement relating to such offering, the prospectus in
that registration statement and other documents CAE has filed with
the SEC for more complete information about CAE and such offering.
You may get these documents for free by visiting EDGAR on the SEC
Web site at www.sec.gov. Alternatively, you may request the
prospectus supplement and prospectus in Canada from Scotia Capital
Inc., Attention: Equity Capital Markets, Scotia Plaza, 62nd Floor,
40 King Street West, Toronto, Ontario M5H 3Y2, or by telephone at
1-416-863-7704 or by email at
equityprospectus@scotiabank.com and in the United States from
Scotia Capital (USA) Inc., Attention: Equity Capital Markets, 250
Vesey Street, 24th Floor, New York, New York, 10281, or by
telephone at 1-212-225-6853 or by email at
equityprospectus@scotiabank.com; from RBC Dominion Securities Inc.,
Attention: Distribution Centre, 180 Wellington Street West, 8th
Floor, Toronto, Ontario M5J 0C2, or by telephone at 1-416-842-5349,
or by email at Distribution.RBCDS@rbccm.com and in the United
States from RBC Capital Markets, LLC, Attention: Equity Syndicate,
200 Vesey Street, 8th Floor, New York, NY 10281, or by telephone at
1-877-822-4089, or by email at equityprospectus@rbccm.com; or from
TD Securities Inc., Attention: Symcor, 1625 Tech Avenue,
Mississauga, Ontario L4W 5P5, or by telephone at 289-360-2009 or by
email at sdcconfirms@td.com and in the United States from TD
Securities (USA) LLC, 31 W 52nd Street, New York, NY 10019 or by
telephone at 212-827-7392. The content of any referenced websites
and other electronic links is not incorporated by reference herein
or in any report or document filed with the SEC.
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
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