 "Avcorp acquires aerostructures division of Hitco Carbon Composites")
Canadian firm Avcorp Industries Inc has entered into a definitive agreement to acquire the US-based composite aerostructures division of a subsidiary of Frankfurt-listed SGL Carbon SE. The transaction will significantly expand the capabilities of Avcorp - which designs and builds major airframe structures for some of the world’s leading aircraft companies such as BAE Systems, Boeing and Bombardier - in composites and offer a strong platform to grow the profitability of the business.
Pursuant to the agreement, Avcorp will purchase the assets of the division of SGL’s subsidiary Hitco Carbon Composites Inc which produces composite parts for commercial and military aerostructures. This includes all inventories, equipment, tooling and other fixed assets, intellectual property, contractual rights, good will, accounts receivable, and work in progress. Hitco’s materials division is not included in the deal. Avcorp will be continuing operations at Hitco’s current aerostructures facilities in Gardena, California.
The addition of the Hitco composites division is anticipated to approximately double Avcorp’s revenues in the immediate term. While not run as a separate accounting unit, the division has been operating at a loss.
Consideration for the acquisition of the assets is principally the assumption by Avcorp of current trade payables and ongoing contractual obligations of the aerostructures business of Hitco.
Avcorp will receive approximately $42 million in cash and payment commitments. SGL will also provide further in kind supplies or payments of up to $5 million over the period to December 31, 2016.
Peter George, CEO, Avcorp Group, commented, “The acquisition of Hitco’s composites division offers a unique opportunity to transform our business by broadening our product range and strengthening our composite capabilities. We also anticipate significant operational efficiencies and better utilisation of our existing assets. Combining the businesses should accelerate Avcorp’s return to profitability.”
Pursuant to the agreement, Avcorp will purchase the assets of the division of SGL’s subsidiary Hitco Carbon Composites Inc which produces composite parts for commercial and military aerostructures. This includes all inventories, equipment, tooling and other fixed assets, intellectual property, contractual rights, good will, accounts receivable, and work in progress. Hitco’s materials division is not included in the deal. Avcorp will be continuing operations at Hitco’s current aerostructures facilities in Gardena, California.
The addition of the Hitco composites division is anticipated to approximately double Avcorp’s revenues in the immediate term. While not run as a separate accounting unit, the division has been operating at a loss.
Consideration for the acquisition of the assets is principally the assumption by Avcorp of current trade payables and ongoing contractual obligations of the aerostructures business of Hitco.
Avcorp will receive approximately $42 million in cash and payment commitments. SGL will also provide further in kind supplies or payments of up to $5 million over the period to December 31, 2016.
Peter George, CEO, Avcorp Group, commented, “The acquisition of Hitco’s composites division offers a unique opportunity to transform our business by broadening our product range and strengthening our composite capabilities. We also anticipate significant operational efficiencies and better utilisation of our existing assets. Combining the businesses should accelerate Avcorp’s return to profitability.”