Blog » Industry Review » Industry Week in Review – October 19, 2012

Industry Week in Review – October 19, 2012

By

Managing Director, KippsDeSanto & Co.

Posted on October 22nd, 2012

Posted under: Industry Review, Mergers & Acquisitions

Over the past week, Hawker Beechcraft announced that it plans to emerge from Chapter 11 protection as a standalone company.  The company is no longer pursuing a transaction with Superior Aviation Beijing Co., Ltd. as the parties could not reach a settlement on the terms of a Plan Sponsorship Agreement.  After Chapter 11, the company plans to rename itself Beechcraft Corporation and will focus on its turboprop, piston, special mission, and trainer / attach aircraft which are the company’s most profitable products.  It will also continue its high margin parts, maintenance, repairs, and refurbishment businesses.

Robert Miller, CEO of Hawker Beechcraft, Inc., said, “We made the decision to proceed with the standalone Plan of Reorganization after determining that, despite our best efforts, the proposed transaction with Superior could not be completed on terms acceptable to the company.  We are disappointed that the transaction did not come to fruition, but we protected ourselves by obtaining a $50 million deposit from Superior that is now fully non-refundable and property of the company.  The go-forward business plan we have developed with our creditors ensures that we will emerge from this process in a strong operational and financial position, with an enhanced ability to compete well into the future.”

Big Movers

Mercury Computer Systems Inc. (Up 6.3%) – Shares are up this week after the company announced that it received a 5-year sole source basic ordering agreement (“BOA”) from the U.S. Navy in support of the continued development of signaling architecture by producing a subset of its latest radar jammer equipment.  The BOA is valued at up to $58 million.

Relevant Transactions

Booz Allen Hamilton to acquire ARINC’s Defense Engineering Services Division, a provider of advanced aviation and maritime engineering, weapons modernization and sustainment, and systems engineering and integration for approximately $154 million.  The acquisition complements Booz Allen’s existing service base, which spans engineering and operations, technology, analytics, and strategy and organization.

Safran SA to acquire Goodrich Electric Power Systems, a provider of aircraft electrical generators and power distribution systems for roughly $401 million.  Goodrich Electric Power Systems is expected to have post sales of $200 million in 2012, with about half coming from spares and maintenance, repair, and overhaul.  The acquisition will also allow Safran to continue to develop new solutions for the electrification of aircraft equipment and closer integration of electrical systems with the aircraft engine.

Eurocopter to acquire Heuliez Aéronautique, a French provider of beating, sliding doors, and canopies for the aeronautical industry.  Heuliez Aéronautique will operate within Helicoptères Aérostructures Services, a subsidiary of Eurocopter.  Terms of the deal were not disclosed.

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