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LMI Aerospace (LMIA) Announces Agreement To Acquire Valent Aerostructures

 December 06, 2012 08:06 AM
 


(By Balachander) LMI Aerospace Inc. (NASDAQ: LMIA) announced an agreement to acquire Valent Aerostructures LLC for roughly $247 million.

The deal also includes a potential earnout of up to $40 million in the event Valent surpasses certain EBITDA thresholds in 2013, LMI said.

LMI, which supplies structural assemblies and components to the aerospace and defense markets, expects the deal to slighthly dilute its 2013 earnings, but "highly" add to bottom-line in 2014.

Kansas City, Missouri-based Valent provides complex, structural components and major sub-assemblies for OEM and Tier 1 airframe manufacturers in the aerospace and defense industries.

[Related -LMI Aerospace (LMIA) Upgraded To 'Buy' By Deutsche Bank On Recent Sell-Off]

LMI said it expects to generate over $480 million of revenue based on projected 2013 results of the combined entities.

"Valent provides additional capabilities, which should position LMI for long-term growth and success in what we believe will be a robust aerospace cycle," said LMI CEO Ronald Saks. "Another important benefit of this combination is increased content on key platforms."

According to LMI, Spirit AeroSystems is Valent's largest customer providing over 50 percent of Valent's sales in 2012. The Boeing 737 platform represents most of these sales.

LMI has entered into a commitment letter with RBC Capital Markets to provide $300 million of new senior secured credit facilities to finance the Valent deal.

The deal is expected to close by the end of 2012.

LMIA shares closed 2.94 percent lower at $18.82 on Wednesday.

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