Woodward Signs Agreement to Acquire HR Textron
February 27 2009 - 4:02PM
Marketwired
Woodward Governor Company (NASDAQ: WGOV) today announced it has
reached a definitive agreement to acquire HR Textron for
approximately $365 million in cash. Under the purchase agreement,
Woodward would acquire all of the outstanding capital stock of HR
Textron from Textron Inc. (NYSE: TXT), its parent company, and the
UK assets used in HR Textron's business. HR Textron would become a
wholly owned subsidiary of Woodward and be integrated into
Woodward's Airframe Systems business segment.
"We believe the combination of HR Textron and Woodward's
Airframe Systems business will significantly enhance the value of
the technologies and related systems offerings of each business,
positioning us for greater growth in motion control applications in
the aerospace and defense markets," said Thomas A. Gendron,
Woodward Chairman and Chief Executive Officer. "The combination of
hydraulic and electromechanical actuation capabilities enables
Woodward to provide our customers with broader and more valuable
systems solutions."
HR Textron's net sales were approximately $260 million in 2008
and the addition is expected to be approximately neutral to
Woodward's earnings per share in fiscal 2009 and accretive in
2010.
HR Textron is an industry leader in the advanced technology,
engineering development, and manufacturing of mission-critical
actuation systems and controls for weapons, aircraft, turbine
engines, and combat vehicles. It is recognized for hydraulic and
electric primary flight control actuation products including
electromechanical actuation systems for unmanned combat air
vehicles and weapons, such as the Joint Direct Attack Munition
(JDAM) and the AIM 9X Sidewinder; hydraulic and electric flight
controls for fixed and rotor wing aircraft; servovalves for global
aerospace; turret controls and stabilization systems for the U.S.
M1 Abrams Main Battle Tank and other armored vehicles worldwide;
and fuel and pneumatics valves for aircraft and helicopters.
HR Textron provides solutions for the critical motion control
systems of customers such as Bell, Boeing, Cessna, General
Dynamics, Lockheed Martin, Raytheon and United Technologies.
Additionally, Woodward believes there will be operating synergies
and significant opportunities for both businesses, including the
potential within the Woodward business segments to share
technologies and leverage the customer base.
HR Textron is headquartered in Santa Clarita, Calif. with
additional facilities in Pacoima, Calif. and Poole, UK, employing
912 people.
Woodward anticipates the acquisition to be completed in April
2009. The completion of the acquisition is subject to customary
closing conditions.
Woodward expects to pay $365 million in cash at closing for all
of the outstanding shares of HR Textron and its related UK assets.
Woodward also expects to receive future tax benefits related to the
acquisition with a net present value of approximately $25 million.
Woodward has committed financing and available cash sufficient to
fund the payment of the purchase price and provide short-term
liquidity after closing. Woodward currently has $215 million
available under its $225 million revolving credit facility and has
obtained a commitment for a $175 million, 364-day bridge facility
from certain of its lenders. The closing of the bridge facility is
subject to customary conditions. Prior to closing, Woodward intends
to seek substitute debt or equity financing for the bridge
facility. If Woodward is unable to obtain substitute financing
prior to closing, it expects to draw on its bridge facility to fund
the payment of the purchase price and provide short-term liquidity
and expects to seek additional financing after the completion of
the acquisition to repay any such borrowings.
There can be no assurance that any substitute or additional
financing will be available on commercially acceptable terms or at
all. Woodward's obligation to close this transaction is not
conditioned upon its ability to secure financing for the
transaction.
About Woodward
Woodward is an independent designer, manufacturer, and service
provider of energy control and optimization solutions for
commercial and military aircraft, turbines, reciprocating engines,
and electrical power system equipment. The company's innovative
fluid energy, combustion control, electrical energy, and motion
control systems help customers offer cleaner, more reliable, and
more cost-effective equipment. Leading original equipment
manufacturers use our products and services in aerospace, power and
process industries, and transportation. Woodward is headquartered
in Fort Collins, Colo., USA and serves global markets in aerospace,
power and process industries, and transportation. Visit our website
at www.woodward.com.
Information in this press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties, including
but not limited to statements regarding the combined company's
plans, objectives, expectations and intentions, the expected impact
of the acquisition on the future earnings of Woodward, anticipated
benefits of the acquisition of HR Textron and expected business
opportunities that may be available to Woodward, the closing date
of the acquisition and the payments to be made by Woodward on that
date, the manner in which Woodward intends to finance the
acquisition and short-term liquidity after the closing, and the
availability of sufficient liquidity to satisfy these funding
requirements. Readers are cautioned that these forward-looking
statements are only predictions and are subject to risks,
uncertainties, and assumptions that are difficult to predict.
Factors that could cause actual results and the timing of certain
events to differ materially from the forward-looking statements
include, but are not limited to, Woodward's inability to consummate
the bridge facility or to obtain substitute or additional financing
for the bridge facility on commercially acceptable terms or at all,
the type, amount and terms of any financing used to replace or
substitute for the bridge facility, the inability of the parties to
consummate the acquisition, the failure of Woodward to successfully
integrate the HR Textron business or realize synergies, and other
risk factors described in Woodward's Annual Report on Form 10-K for
the year ended September 30, 2008, and the Quarterly Report on Form
10-Q for the quarter ended December 31, 2008.
CONTACT: Rose Briani-Burden Business Communications 815-639-6282
Woodward Governor Company 1000 East Drake Road Fort Collins,
Colorado 80525, USA Tel: 970-482-5811 Fax: 970-498-3058
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