Bombardier Announces Definitive Agreement to Sell Aerostructures Business to Spirit AeroSystems Holding, Inc.

press release

October 31, 2019 - Montréal

 

• Sale of aerostructures business supports Aviation transformation, refocuses on business aviation and strengthens liquidity
• Expected cash proceeds of $500 million (1)plus the assumptions of liabilities
• Transaction implies enterprise value to 2019E EBITDA multiple of approximately 10x

All amounts in this press release are in U.S. dollars unless otherwise indicated.

Bombardier (TSX: BBD.B) today announced a definitive agreement to sell its aerostructures business to Spirit AeroSystems Holding, Inc. (Spirit), supporting Bombardier’s strategic decision to focus on its two strong growth pillars, trains and business aircraft.

With this transaction, Spirit will acquire Bombardier’s aerostructures activities and aftermarket services operations in Belfast, U.K.; Casablanca, Morocco; and its aerostructures maintenance, repair and overhaul (MRO) facility in Dallas, U.S. 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.”

About Bombardier

With over 68,000 employees, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries as well as a broad portfolio of products and services for the business aviation, commercial aviation and rail transportation markets. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2018, Bombardier posted revenues of $16.2 billion US. The company is recognized on the 2019 Global 100 Most Sustainable Corporations in the World Index. News and information are available at bombardier.com or follow us on Twitter @Bombardier.

Bombardier, Challenger, Global, Global 7500, and Learjet are trademarks of Bombardier Inc. or its subsidiaries.