B/E AEROSPACE SHARES RISE ON $400M ACQUISITION

Published Monday, January 9, 2012 7:00 am
 
B/E Aerospace Chairman and CEO Amin J.
Khoury expects an earnings boost this year
from the acquisition of UFC Aerospace Corp.

B/E Aerospace has made a $400 million deal to acquire UFC Aerospace Corp., which offers supply chain management and inventory logistics solutions to aerospace equipment manufacturers.

Holtsville, N.Y.-based UFC distributes more than 150,000 SKUs (stock keeping units) – including fasteners, chemicals, paints, sealants, tooling and duct/bent tubing assemblies – to more than 1,000 customers, B/E said in a news release.

The Wellington-based company (NASDAQ: BEAV) describes itself as the world’s leading manufacturer of aircraft cabin interior products.

Shares were up 94 cents, or 2.36 percent, to $40.73 in midmorning trading. The 52-week high was $42.85 on July 26. The 52-week low was $28.83 on Oct. 4.

UFC has a string of offices, some of which are near major aircraft manufacturers including Boeing (NYSE: BA) and General Dynamics (NYSE: GD). Among its branch offices are Delray Beach; Lecanto in Central Florida; Carson, Calif.; Cornwall, N.Y.; St. Louis; Fort Worth, Texas; Honeyville, Utah; Auburn, Wash.; Kent, England; Singapore; and Saint Laurent, Quebec.

“This acquisition supports our commitment to provide the best and broadest portfolio of aerospace consumables products and services to our customers,” B/E Chairman and CEO Amin J. Khoury said in the release.

Khoury said the price was a multiple of about 9.5 times adjusted 2011 EBITDA (earnings before interest, taxes, depreciation and amortization), plus the estimated net present value of the tax benefits from tax deductible goodwill.

The acquisition is expected to close before the end of the first quarter.

As a result of the transaction, B/E is increasing its 2012 earnings per share guidance by 10 cents, to $2.75 a share.

B/E earned $65.4 million, or 64 cents a share, in the third quarter, up from $41 million, or 41 cents a share, in the year-ago quarter. Revenue rose 28.5 percent from $495 million to $495 million.

South Florida Business Journal
by Kevin Gale, Editor in Chief


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