LMI Aerospace, Inc. [LMIA] yesterday said it has agreed to acquire Valent Aerostructures, LLC, for $237 million in a deal that expands its work on existing aircraft and enables it to provide customers with new solutions.
The deal, which is expected to close this month, also includes an additional $9.7 million in retained obligations as part of the purchase price and has an earnout provision worth up to $40 million if Valent surpasses certain earnings thresholds in 2013. LMI expects the acquisition to be accretive to earnings in 2014.
LMI supplies structural assemblies, kits and components and provides design engineering services to the aerospace and defense industry. Valent is a provider of structural components, major sub-assemblies and machined parts for aircraft manufacturers and their tier one suppliers in the aerospace and defense industry.
Valent, which is based in Missouri, has significant content on commercial, business jet and military aircraft platforms including Boeing’s 737, 747-8, 777 and 787 airplanes, the Marine Corps V-22 tilt-rotor aircraft and the General Dynamics [GD] Gulfstream G650 business jet.
Combined with Valent, LMI expects to generate more than $480 million in sales next year.
“The acquisition of Valent is transformational for LMI and represents a major step in fulfilling LMI’s strategic objectives,” Ronald Saks, LMI’s CEO, said in a statement. “Valent provides additional capabilities, which should position LMI for long-term growth and success in what we believe will be a robust aerospace cycle. Another important benefit of this combination is increased content on key platforms.”
RBC Capital Markets is the financial adviser to LMI on the deal and Valent’s adviser is Well Fargo Securities.