Avcorp Industries Inc. (AVP:TSX) has completed its acquisition of the assets and certain liabilities of the composite aerostructures division of SGL Carbon SE´s subsidiary, Hitco Carbon Composites Inc., the company said.
The acquisition will approximately double Avcorp´s revenue while strengthening its balance sheet. This acquisition will also significantly expand Avcorp´s carbon composite manufacturing capabilities and result in the company receiving cash, payment commitments and supplies valued at approximately CDN 65 million.
Avcorp will receive approximately CDN 58 million in cash and payment commitments from SGL, the parent company of Hitco;
Avcorp will also receive in kind supplies and/or payments totaling up to CDN 7 million through December 31, 2016;
Supplementing the cash and in kind payments received, Avcorp will assume approximately CDN 41 million of working capital, adding to the positive liquidity of the transaction;
Equipment received as a component of the acquisition transaction has an estimated fair market value of USD 54 million.
Hitco´s production is expected to contribute CDN 93 million in new revenue for Avcorp on an annual basis, while the Hitco Aerostructures division has been operating at a loss;
Avcorp will continue to operate Hitco´s Aerostructures division facilities from its current location in Gardena, California, transitioning to the new name of Avcorp Composite Fabrication (ACF).
The transaction has received all relevant regulatory and third-party approvals.
The Avcorp Group designs and builds major airframe structures for aircraft companies, including BAE Systems, Boeing and Bombardier.