U.K.-based Cobham plc Monday said it completed the acquisition of the 50 percent it did not already own in FB Heliservices Ltd, FB Leasing Limited and FBS Limited–together called FBH–from its long standing joint venture partner, Bristow Helicopters Limited [BRS].
The transaction comprises cash consideration of approximately $111.8 million payable on completion, together with the assumption of Bristow’s share of FBH’s net debt.
FBH’s existing management team will remain with the company following the acquisition.
It is expected the acquisition will be immediately earnings enhancing and will cover the cost of capital in the first year of ownership, the company said in a statement. The implied transaction multiple is an estimated 7.4x FBH’s 2012 EBITDA.
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| FB Heliservices, Now Cobham plc |
“FBH is a business we know extremely well through our long established joint venture arrangement and it has capabilities that are highly complementary to our existing Aviation Services business,” said Cobham Chairman and CEO Bob Murphy. “It also brings a long track record of operating in attractive, specialist outsourcing markets with demonstrable success in winning contracts across the globe.”
FBH specializes in defense helicopter training in the United Kingdom and elsewhere, including a contract with the Ministry of Defense to train helicopter crews for all branches of the armed forces, including an approximately $303 million four-year contract with two potential one-year extensions awarded in March 2012 (Defense Daily, March 7, 2012).
As U.K. publications point out, FBH trained Prince William on a CH-47 Chinook heavy lift helicopter and Prince Harry on an AH-64 Apache attack helicopter. Both aircraft built by Boeing [BA].
FBH also provides search and rescue, logistics and emergency medical services for government clients globally. In March 2013, Bristow was awarded an approximately 10-year, $2.4 billion contract to provide search and rescue services in the United Kingdom previously provided by the Royal Navy and Air Force (Defense Daily, March 27, 2013).
Its capabilities are complementary to Cobham’s existing Aviation Services business, which provides services to the fixed-wing aircraft market, allowing Cobham to offer a broader service to a wider customer base.
Acquiring full control of FBH strengthens Cobham’s position in a sector that is characterized by long-term contracts and which is expected to benefit from a trend toward increased outsourcing of helicopter operations and associated support services.
This trend is expected to be driven by the outsourcing of existing in-house operations and by training opportunities arising from the sale of new helicopters into faster growth geographies. Consistent with Cobham’s strategy, FBH has a good pipeline of new business opportunities in a number of these faster growth markets. These opportunities will further build on its existing, geographically diversified operations, strengthening Cobham’s exposure to non-U.S. defense/security markets.
In addition, the acquisition combines FBH’s proven helicopter capabilities with Cobham’s long standing position and reputation in its fixed wing Aviation Services business. This will enable the Group to offer customers the convenience of a transport solution that includes a combination of helicopters and fixed-wing aircraft in its outsourcing markets.
“We also offer our thanks to Bristow at the conclusion of this joint venture partnership, as FBH has successfully served to benefit all its stakeholders, including the UK Ministry of Defense and its other customers globally,” Murphy said.
FBH owns more than 60 helicopters and supports over 100 helicopters globally, conducting over 40,000 flight hours each year.