HEICO Corp. [HEI] on Monday said it has agreed to acquire Wencor Group
for nearly $2.1 billion in a deal that complements its business supply aftermarket parts for commercial and military aircraft.
HEICO is paying $1.9 billion in cash and $150 million in stock to acquire Wencor from affiliates of Warburg Pincus LLC and the company’s management. The transaction is subject to regulatory approvals and is expected to close by the end of 2023.
Wencor also provides distribution services, and aircraft and engine accessory component repair and overhaul services. The company’s customers include airlines, aircraft maintenance repair and overhaul companies, military agencies and defense contractors.
Wencor is based in Georgia and has about 9,000 employees at more than 100 facilities worldwide, including 1,000 employees at 19 facilities in the U.S.
HEICO expects Wencor will have about $724 million in sales and $153 million in adjusted earnings, respectively, in 2023. The company also expects the transaction to result in estimated tax benefits of about $75 million that will be realized through 2038.
HEICO also expects the acquisition to be accretive to earnings within the year following closing.
Wencor’s leadership and CEO, Shawn Trogdon, will continue to lead the business, which will become part of HEICO’s Flight Support Group.
“The Wencor acquisition materially expands HEICO’s aftermarket product offerings, enabling the combined company to offer even greater savings and capabilities to its customers, while expanding our new products and services development capacity,” Laurans Mendelson, HEICO’s chairman and CEO, and Eric Mendelson, HEICO’s co-president and CEO of the Flight Support Group, said in a statement.
Citi is Wencor’s lead adviser on the deal and Jefferies is co-adviser. William Blair and Alderman & Company are also advising Wencor. Morgan Stanley is HEICO’s lead financial adviser with RBC Capital Markets, Truist Securities, Lazard, and Moelis & Company also advising.