TRANSACTION EXPECTED TO MEANINGFULLY
STRENGTHEN TRIUMPH'S BALANCE
SHEET AND FOCUS COMPANY ON ITS OEM AND IP-BASED
AFTERMARKET BUSINESS
RADNOR,
Pa., Dec. 21, 2023 /PRNewswire/ -- Triumph
Group, Inc. (NYSE: TGI) ("TRIUMPH" or the "Company") announced today
that it has entered into a definitive agreement with AAR CORP.
(NYSE: AIR) to sell its Product Support business. The transaction
is valued at $725 million,
representing a 14.5x trailing 12 months Adjusted EBITDAP multiple
as of September 30, 2023. The primary
intended use of proceeds from the transaction is debt reduction.
The net after-tax proceeds are expected to be approximately
$700 million, resulting in pro forma
net leverage of approximately 4.0x net debt to Adjusted EBITDAP as
of March 2024.
The Product Support business is an industry leader in the
Maintenance, Repair and Overhaul (MRO) of structures and
airframe and engine accessories, servicing both the commercial and
military aftermarkets across five primary locations. The business
generated revenues of approximately $268
million for the trailing 12 months ended September 30, 2023.
"We are pleased to enter into this transformative agreement
which recognizes the strength of our MRO business and delivers
immediate and substantial value to TRIUMPH and our stakeholders. This transaction
creates a win-win-win arrangement between TRIUMPH, AAR, and our customers by enabling
TRIUMPH to greatly accelerate our
deleveraging progress while placing our third-party Product Support
business with a market-leading MRO company that has a proven track
record of customer support" said Dan
Crowley, TRIUMPH's
chairman, president, and chief executive officer. "By strengthening
our balance sheet and focusing on our OEM component, spares and
IP-based aftermarket business, TRIUMPH will further improve its capacity to
win and profitably grow in the expanding markets we serve."
Upon completion of the transaction, TRIUMPH will advance in aerospace and its
adjacent markets as a value-added and IP-based business consisting
of four pure play engineered systems components and aftermarket
companies focused on Actuation Products and Services, Systems
Electronics and Controls, Geared Solutions and Interiors. With 21
sites and approximately 4,400 employees, over 60% of the Company's
products and services will be based on TRIUMPH intellectual property and 90% supplied
on a sole-sourced basis.
The transaction is expected to close in the first quarter of the
2024 calendar year, subject to customary closing conditions,
including receipt of certain regulatory approvals. The Company
intends to update its outlook during TRIUMPH's upcoming earnings call in
February 2024.
Goldman Sachs is acting as financial advisor and Skadden, Arps,
Slate, Meagher & Flom LLP is serving as legal counsel on the
transaction to TRIUMPH.
About TRIUMPH
TRIUMPH, headquartered in
Radnor, Pennsylvania, designs,
engineers, manufactures, repairs and overhauls a broad portfolio of
aerospace and defense systems and components. The company serves
the global aviation industry, including original equipment
manufacturers and the full spectrum of military and commercial
aircraft operators.
More information about TRIUMPH
can be found on the Company's website at triumphgroup.com.
About AAR
AAR is a global aerospace and defense aftermarket solutions
company with operations in over 20 countries. Headquartered in the
Chicago area, AAR supports
commercial and government customers through four operating
segments: Parts Supply, Repair & Engineering, Integrated
Solutions, and Expeditionary Services. Additional information can
be found at aarcorp.com.
Forward Looking Statements
Statements in this release which are not historical facts are
forward-looking statements under the provisions of the Private
Securities Litigation Reform Act of 1995, including statements of
expectations of or assumptions about financial and operational
performance, revenues, earnings per share, cash flow or use, cost
savings, operational efficiencies and organizational restructurings
and our evaluation of potential adjustments to reported amounts, as
described above. Forward-looking statements may also be identified
because they contain words such as "anticipate," "believe,"
"continue," "could,'' "estimate," "expect," "intend," "may,"
"might," "plan," "project," "seek," "should," "target," "will," or
similar expressions and the negatives of those terms. All
forward-looking statements involve risks and uncertainties which
could affect the Company's actual results and could cause its
actual results to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company.
Such risks and uncertainties include, without limitation: the
inability to consummate the proposed transaction within the
anticipated time period, or at all; the risk that the proposed
transaction disrupts the Company's current plans and operations or
diverts management's attention from its ongoing business; and the
amount of costs, fees and expenses related to the proposed
transaction. Further information regarding the important factors
that could cause actual results to differ from projected results
can be found in Triumph Group's reports filed with the SEC,
including our Annual Report on Form 10-K for the fiscal year ended
March 31, 2023.
View original
content:https://www.prnewswire.com/news-releases/triumph-announces-sale-of-product-support-business-to-aar-302020960.html
SOURCE Triumph Group