Spirit AeroSystems, Bombardier change purchase deal
November 05, 2020 - United States Of America
Spirit AeroSystems Holdings has signed an amendment to the definitive agreement between Spirit AeroSystems (Spirit) and Spirit AeroSystems Global Holdings (Spirit UK), wholly owned subsidiaries of the company, and Bombardier, Bombardier Aerospace UK, Bombardier Finance and Bombardier Services Corporation (collectively, the Bombardier Sellers).
Pursuant to the amendment, Spirit UK will take over the outstanding equity of Short Brothers (Shorts) and Bombardier Aerospace North Africa SAS (ANA), and Spirit will acquire substantially all the assets of the maintenance, repair and overhaul business in Dallas, Texas and assume certain liabilities of Shorts and BANA (the acquisition).
Spirit AeroSystems Holdings has entered into an amendment to the definitive agreement between Spirit AeroSystems (Spirit ) and Spirit AeroSystems Global Holdings (Spirit UK), wholly owned subsidiaries of the company, and Bombardier, Bombardier Aerospace UK, Bombardier Finance and Bombardier Services Corporation (collectively, the Bombardier Sellers) pursuant to which Spirit UK will acquire the outstanding equity of Short Brothers (Shorts) and Bombardier Aerospace North Africa SAS ("ANA), and Spirit will acquire substantially all the assets of the maintenance, repair and overhaul business in Dallas, Texas and assume certain liabilities of Shorts and BANA (the Acquisition).
The amendment reduces the net proceeds purchase price payable to the Bombardier Sellers from $500 million to $275 million. Spirit will continue to make a special contribution of £100 million (approximately $130 million) to the Shorts pension scheme on the first anniversary of closing.
On a US GAAP basis, the net pension liabilities of the Shorts pension scheme to be assumed by Spirit are approximately $300 million (measured as of September 30, 2020). Shorts is also a party to a repayable investment agreement with the UK's Department for Business, Energy and Industrial Strategy, and Spirit will, at closing, assume Shorts' financial payment obligations under this agreement, which are approximately $290 million on a US GAAP basis (measured as of September 30, 2020).
At signing on October 31, 2019, Spirit reported that the acquisition had a total enterprise valuation of $1,090 million. The amendment reduces the total enterprise valuation to $865 million.
"This acquisition accelerates our strategic transformation by increasing our Airbus content with the A220 composite wing and growing our aftermarket business," said Spirit AeroSystems president and chief executive officer Tom Gentile. "The transaction secures Spirit's position as the world's leader in composite structures for aircraft and as one of the leaders in integrated wing technologies. As with the rest of the aerostructures industry, performance will be adversely impacted due to COVID-19 for the coming years, but we worked closely with Bombardier on a mutually agreeable price reduction that mitigates this impact. Going forward, we look forward to becoming one of Bombardier's largest suppliers."
Pursuant to the amendment, Spirit UK will take over the outstanding equity of Short Brothers (Shorts) and Bombardier Aerospace North Africa SAS (ANA), and Spirit will acquire substantially all the assets of the maintenance, repair and overhaul business in Dallas, Texas and assume certain liabilities of Shorts and BANA (the acquisition).
Spirit AeroSystems Holdings has entered into an amendment to the definitive agreement between Spirit AeroSystems (Spirit ) and Spirit AeroSystems Global Holdings (Spirit UK), wholly owned subsidiaries of the company, and Bombardier, Bombardier Aerospace UK, Bombardier Finance and Bombardier Services Corporation (collectively, the Bombardier Sellers) pursuant to which Spirit UK will acquire the outstanding equity of Short Brothers (Shorts) and Bombardier Aerospace North Africa SAS ("ANA), and Spirit will acquire substantially all the assets of the maintenance, repair and overhaul business in Dallas, Texas and assume certain liabilities of Shorts and BANA (the Acquisition).
The amendment reduces the net proceeds purchase price payable to the Bombardier Sellers from $500 million to $275 million. Spirit will continue to make a special contribution of £100 million (approximately $130 million) to the Shorts pension scheme on the first anniversary of closing.
On a US GAAP basis, the net pension liabilities of the Shorts pension scheme to be assumed by Spirit are approximately $300 million (measured as of September 30, 2020). Shorts is also a party to a repayable investment agreement with the UK's Department for Business, Energy and Industrial Strategy, and Spirit will, at closing, assume Shorts' financial payment obligations under this agreement, which are approximately $290 million on a US GAAP basis (measured as of September 30, 2020).
At signing on October 31, 2019, Spirit reported that the acquisition had a total enterprise valuation of $1,090 million. The amendment reduces the total enterprise valuation to $865 million.
"This acquisition accelerates our strategic transformation by increasing our Airbus content with the A220 composite wing and growing our aftermarket business," said Spirit AeroSystems president and chief executive officer Tom Gentile. "The transaction secures Spirit's position as the world's leader in composite structures for aircraft and as one of the leaders in integrated wing technologies. As with the rest of the aerostructures industry, performance will be adversely impacted due to COVID-19 for the coming years, but we worked closely with Bombardier on a mutually agreeable price reduction that mitigates this impact. Going forward, we look forward to becoming one of Bombardier's largest suppliers."