US-based B/E Aerospace has signed an agreement to purchase aerospace supply chain management and inventory logistics company UFC Aerospace for approximately $400m.
B/E Aerospace chairman and CEO Amin Khoury said: "The acquisition of UFC substantially expands our capability to offer creative and differentiated supply chain solutions, value-added inventory logistics services such as 3PL and 4PL programmes."
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The purchase will help B/E Aerospace to provide customised kitting solutions and also expands its broad consumables product portfolio. B/E Aerospace said the acquisition price is a multiple of about 9.5 times adjusted 2011 earnings before interest, taxes, depreciation and amortization (EBITDA) and the estimated net present value of the tax benefits from tax deductible goodwill.
The acquisition is expected to close before the end of the first quarter of 2012. With the accretive nature of the deal B/E Aerospace has raised its 2012 earnings guidance by approximately $0.10 per share to approximately $2.75 per share.
"The company’s future revenue growth will be fuelled by key positions on critical customer platforms, its ability to continue to respond to customer demand for same-day service, and its ability to respond to aerospace customer trends toward outsourcing more and more key elements of the supply chain through complex logistic solutions," Khoury said.
UFC currently distributes over 150,000 SKUs (stock keeping units) that include fasteners, chemicals, paints, sealants, tooling and tubing assemblies to over 1,000 customers.
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By GlobalDataB/E Aerospace reported a profit of $65.4m during the third quarter of 2011, compared to $41m in the same period in 2010, while its revenue increased 28.5% during that period.
