The European Aeronautic Defence and Space Co., (EADS) subsidiary Eurocopter expanded its aerospace support and services presence in North America and globally yesterday saying it entered into a Support Agreement with Canada’s Vector Aerospace Corp.
EADS CEO Louis Gallois said: “This acquisition perfectly fits EADS’ Vision 2020 strategy, increasing services, strengthening the helicopter business, international and more specifically North American exposure while keeping a good balance between military and civil activities. It is also an excellent investment opportunity for Eurocopter, as Vector Aerospace has proven resilient and profitable growth. EADS sees in this acquisition a potential for synergies and value creation for our shareholders.”
The acquisition will also improve the natural dollar hedge, the companies said in a statement. The robust and proven operational and financial performance of Vector Aerospace will support EADS’ EBIT targets.
This synergistic acquisition is accretive for EADS and has been approved by the EADS Board of Directors.
Under the agreement Eurocopter Holding will acquire all of the issued and outstanding common shares of Vector Aerospace by way of a take-over bid for consideration of about $13.33 in cash per common share, the offer.
The offer values Vector Aerospace equity at approximately $641 million. Net debt was approximately $3.1 million as of Dec. 31.
The offer price represents a premium of approximately 15 percent over the March 25 closing price of the Common Shares on the Toronto Stock Exchange (TSX) and a premium of approximately 80 percent over the closing price of the Common Shares on the TSX on Dec. 2nd, the last trading day before Vector Aerospace publicly announced that it was reviewing strategic alternatives to enhance shareholder value.
Last week, the companies announced an exclusivity agreement (Defense Daily, March 25).
The Board of Directors of Vector Aerospace, after receiving the recommendation of the Special Committee, has unanimously approved the offer and determined it is in the best interests of Vector Aerospace for the offer to be made.
Scotia Capital, exclusive advisor to Vector Aerospace’s Special Committee of Independent Directors, provided the Board of Directors with a fairness opinion indicating that the consideration to be received by Vector Aerospace shareholders is fair from a financial point of view. In addition, shareholders holding approximately 60 percent of the issued and outstanding Common Shares have entered into irrevocable lock-up agreements with Eurocopter Holding under which they have agreed to tender their common shares to the offer.
Vector Aerospace will become Eurocopter Holding’s independent multi-platform maintenance, repair and overhaul (MRO) services provider. It will maintain and develop its brand name.
In 2010, Vector Aerospace generated a turnover of about $558.9 million–roughly the equivalent of a quarter of Eurocopter’s current Support & Services turnover, the companies said in a statement.
Completion of the transaction will enable Eurocopter to capitalize on its own commercial network together with Vector Aerospace’s offering in order to position itself as a leading global multi-platform service provider with an extended presence in North America and the United Kingdom.
Vector Aerospace will benefit from Eurocopter’s global footprint and presence in 25 countries to develop in fast growing markets such as Asia and Latin America.
The acquisition of Vector Aerospace is a major step towards expanding Eurocopter’s Support & Services footprint into new areas, such as the maintenance of engines and non- Eurocopter products.
Eurocopter Holding Lutz Bertling said, “This opportunity will provide the Eurocopter group with a high-level of expertise, especially in public-private partnerships for the maintenance on governmental aircraft. The complementary nature of our worldwide network of subsidiaries and Vector Aerospace’s own network will enable us to develop our activities jointly, both faster and more efficiently. Vector Aerospace will be managed as an independent multi-customer platform MRO.”
Declan O’Shea, CEO of Vector Aerospace, said: “We believe that being part of the Eurocopter group will allow Vector Aerospace and our people to pursue our long history of profitable growth and excellent levels of quality and customer service.”
Completion of the offer is subject to usual and customary conditions including regulatory approvals.