Héroux-Devtek completes CESA acquisition
By Wings Staff
Héroux-Devtek Inc. of Longueuil, Que., an international manufacturer of aerospace products, completed the acquisition of Compañia Española de Sistemas Aeronáuticos, S.A. (CESA), a subsidiary of Airbus SE, for a purchase price of 137 million euros ($206 million), including CESA’s net outstanding debt of 23 million euros ($35 million). The transaction is subject to customary closing adjustments.
By Wings Staff
“We are very pleased to have completed this acquisition which is the largest in our history and represents an important milestone in our international expansion,” said Héroux-Devtek president and CEO, Gilles Labbé. “CESA will allow us to increase our market presence in Europe, gain important content on several key aircraft programs and leverage customer relationships with Airbus and other key customers.”
Labbé continues to explain the acquisition also expands Héroux-Devtek’s product and service offering into actuation and hydraulic systems and adds new technology, such as electromechanical actuation.
“Our product mix will also evolve with 42 per cent of revenues being generated from proprietary products,” Labbé said. “Partnered with the complementary addition of Beaver’s expertise in ball screws, we see great opportunity to grow the business in the actuation market, which is significantly larger than the landing gear market.”
Fernando Alonso, head of military aircraft at Airbus Defence and Space explained CESA will remain a key supplier for Airbus. “CESA and its employees are set to benefit from the new strategic owner’s strong industrial plan over the coming years,” he said.
The transaction was funded through a combination of a $50 million seven-year unsecured subordinated term loan provided by Fonds de solidarité FTQ, the corporation’s revolving credit facility, and available cash on hand. In connection with this acquisition, the corporation’s credit facility was amended, increasing the borrowing limit to $250 million from $200 million.
Headquartered in Madrid, Spain, CESA is a top European provider of fluid mechanical and electromechanical systems for the aerospace industry. Its main product lines include actuation and hydraulic systems, as well as landing gear products. CESA provides design and development engineering, certification, manufacturing, assembly and fleet support to a range of customers and aircraft programs. It operates a 366,000-square-foot complex in Madrid, as well as another facility in Seville. CESA employs a workforce of approximately 300 employees.
As a result of the acquisition, Héroux-Devtek is updating its sales guidance for fiscal 2019. Management now expects sales for fiscal 2019 to be in the range of $460 million to $470 million, representing an increase of approximately 20 per cent over last year. Capital expenditures are expected to be approximately $20 million. Management expects fiscal 2022 sales in the range of $620 million to $650 million.
Héroux-Devtek specializes in the design, development, manufacture and repair and overhaul of landing gear and actuation systems and components for the Aerospace market. The corporation is the third largest landing gear company worldwide, supplying both the commercial and defence sectors of the Aerospace market with new landing gear systems and components, as well as aftermarket products and services. It also manufactures, hydraulic systems, fluid filtration systems and electronic enclosures.
Approximately 90 per cent of Héroux-Devtek’s sales will now be outside of Canada, including about 50 per cent in the United States. In addition to its head office in Longueuil, Héroux-Devtek has facilities in the Greater Montreal area (Longueuil, Laval and St-Hubert); Kitchener, Cambridge and Toronto, Ontario; Springfield and Strongsville, Ohio; Wichita, Kansas; Everett, Washington; Livonia, Michigan; Runcorn, Nottingham and Bolton, United Kingdom; and now Madrid and Seville, Spain.