5 March 2021
Senior plc: Agreement to divest Senior Aerospace Connecticut
Senior plc ("Senior" or the "Group"), an international manufacturer of high technology components and systems, principally for the worldwide aerospace & defence, land vehicle and power & energy markets, today announces the divestiture of Senior Aerospace Connecticut, our stand alone, build-to-print helicopter structures operating business to PCX Aerosystems, LLC. for $74m (£53m)(1).
Senior Aerospace Connecticut is a build-to-print manufacturer of precision metallic parts for the aerospace industry, supplying machined parts from bar stock, forgings and castings for rotorcraft and turbine engines. It is the only operating business in the Group whose primary focus is build-to-print parts for the rotary sector and we believe it is better suited to a larger organisation, which is primarily focused on that market. The business has approximately 100 employees based in Enfield, Connecticut, USA.
Net cash proceeds from the transaction are expected to be approximately $66m (£47m)(1), after working capital adjustments, taxes and other transaction-related costs. Consideration is payable in cash at completion and subject to customary completion adjustments.
During the year to 31 December 2019, Senior Aerospace Connecticut generated revenue of $43.1m (£33.7m)(2), with EBITDA of $6.5m (£5.1m) and operating profit of $4.9m (£3.8m). These figures were consolidated within the results of Senior Aerospace in 2019. As at 30 June 2020, gross assets subject to the transaction amounted to $12.4m (£10.0m)(3) and goodwill allocated to this cash generating unit that will be written-off on disposal amounted to $20.9m (£16.9m)(3). Further details will be made available in our 2020 full year results on Monday 8 March 2021.
The divestiture is consistent with Senior's strategy to review the overall portfolio of our businesses and evaluate their strategic fit within the Group. The net proceeds will be used to further strengthen Senior's balance sheet and provide greater flexibility for the Group to operate within its capital deployment framework.
David Squires, CEO of Senior plc said: "I am confident that the divestment of Senior Aerospace Connecticut is in the best interests of all of our stakeholders. It is a good business, which is reflected in the transaction value, and I believe that it is best able to fulfil its potential by being part of a larger helicopter structures business. We have a great leadership team in Connecticut with a capable and talented workforce: I would like to thank them for their loyal service to Senior plc and wish them all the best for the future."
The transaction is expected to close in H1 2021, subject to customary closing conditions.
Lazard & Co., Limited acted as exclusive financial adviser and Buchanan Ingersoll & Rooney PC as legal adviser to Senior on the transaction.
Notes
This announcement contains inside information.
| (1) | At the current US Dollar exchange rate of $1.40. |
| (2) | The US Dollar exchange rate applied in the translation of revenue, profit and cash flow items at average rates for 2019 was $1.28. |
| (3) | The US Dollar exchange rate applied to the balance sheet at 30 June 2020 was $1.24. |
Further information
| Bindi Foyle | Group Finance Director, Senior plc | +44 (0) 1923 714 725 |
| Jennifer Ramsey | Director of Investor Relations, Senior plc | +44 (0) 1923 714 722 |
| Richard Webster-Smith | Finsbury | +44 (0) 7796 708 551 |
About Senior
Senior is an international manufacturing group with operations in 13 countries. It is listed on the main market of the London Stock Exchange (symbol SNR). Senior designs, manufactures and markets high technology components and systems for the principal original equipment producers in the worldwide aerospace & defence, land vehicle and power & energy markets. Further information on Senior plc may be found at: www.seniorplc.com
About PCX Aerosystems
PCX Aerosystems is a leading provider of flight-critical, life-limited dynamic components and systems for demanding aerospace applications. Further information on PCX Aerosystems may be found at: www.pcxaero.com
Cautionary Statement
This announcement contains certain forward-looking statements. Such statements are made by the Directors in good faith, based on the information available to them at the time of the announcement, and they should be treated with caution due to the inherent uncertainties underlying any such forward-looking information.
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