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Spirit AeroSystems buying select assets of Bombardier

05 Nov '19

2 min read

Pic: Spirit AeroSystem

Spirit AeroSystems Holdings is taking over select assets of Bombardier aerostructures and aftermarket services businesses in Belfast, Northern Ireland (known as Short Brothers); Casablanca, Morocco; and Dallas, United States, for cash consideration of $500 million. This gives an opportunity Spirit to expand its operations into Northern Ireland and Morocco.

In addition, Spirit AeroSystems will assume approximately $300 million in net pension liabilities, and approximately $290 million of government grant repayment obligations, for a total enterprise valuation of $1,090 million. At closing, Spirit AeroSystems will pay $500 million to Bombardier and will make a cash contribution of approximately $130 million towards the pension liability, for total cash at closing of $630 million.

"The Bombardier operations bring world-class engineering expertise to Spirit and add to a strong track record of innovation, especially in advanced composites," said Spirit AeroSystems president and chief executive officer Tom Gentile. "Belfast has developed an impressive position in business jet fuselage production, in addition to the world-acclaimed fully integrated A220 composite wing. This acquisition is in line with our growth strategy of increasing Airbus content, developing low-cost country footprint, and growing our aftermarket business."

Gentile added that the Spirit team is excited about the opportunity to expand its operations into Northern Ireland and Morocco. The addition of the entire work package for the A220 wing and its technology are critical for the future of next-generation aircraft.

The acquired Bombardier operations employ more than 4,000 people at three sites comprising approximately 3.4 million square feet. The backlog of work includes long-term contracts on the Airbus A220 and A320neo, along with Bombardier business and regional jets.

In aerostructures and fabrication, the acquired business is a global player, delivering composite and metallic wing components, nacelles, fuselages and tail assemblies, along with high-value mechanical assemblies made out of aluminum, titanium and steel. The acquired business also brings a world-class aftermarket business which more than doubles Spirit's geographic reach globally.

The expected revenues of the acquired Bombardier operations will be approximately $1 billion in 2019. The transaction is expected to close in the first half of 2020.

Fibre2Fashion News Desk (SV)