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LONDON, UK / ACCESSWIRE / August 21, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for the leading airplane-parts maker, HEICO Corp. (NYSE: HEI), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=HEI. The Company announced on August 18, 2017, that its Electronic Technologies Group entered into a stock purchase agreement to acquire 100% stock of AeroAntenna Technology Inc. (AAT). This transaction marks the largest purchase in HEICO's history. The deal is expected to position HEICO for continued strength among South Florida's robust aviation industry. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Financial Implications
- HEICO has agreed to a purchase price of $316.5 million in cash, which is to be paid at closing of the deal. In addition to this, the Company has committed to $20 million in cash earn-out payment if AAT meets its earnings targets.
- This purchase price comprises around $37 million as a compensation for sellers for certain tax elections, which will result in a net cash tax benefit to HEICO worth a similar amount.
- HEICO forecasts the acquisition to be accretive to its earnings within the first year after closing. According to the Company, the purchase price falls within the typical earnings multiple that the Company targets for acquisitions.
- It plans to finance the purchase through its existing cash balance along with existing revolving credit facility. However, additional financial details about the transaction were not disclosed.
AAT, a Great Fit for HEICO
Laurans A. Mendelson, Chairman and Chief Executive Officer of HEICO, as well as Victor H. Mendelson, HEICO's Co-President and Chief Executive Officer of the Electronics Technologies Group, jointly lauded the acquisition. They stated that AAT is a great fit for HEICO. AAT is a leader in the design and production of high-performance active antenna systems for critical defense applications, precision guided munitions, commercial aircraft, and other commercial uses. The Company is a renowned leader in several antenna types, such as GPS, aircraft navigation, and satellite communications antennas. Yosef Klein founded AAT in 1991 and since then it has developed a strong brand name through its unique product offering and incessantly innovative research and development platform.
The leaders expressed their excitement on partnering with AAT. They mentioned that AAT's superior quality antennas and relentless focus on customer needs are an essential part of its DNA and have been the main drivers of its long-term success. AAT also has an outstanding management team lead by its founder and President, Joe Klein. Both leaders welcome Joe and his entire talented AAT team to the HEICO family.
Joe Klein, AAT's President held similar views about the acquisition. He stated that he was thrilled to partner with HEICO. He announced:
"From the moment we met, there was an immediate chemistry between our two teams. I could not be more excited to join the HEICO team and look forward to the future."
No Changes in Location and Staff for AAT
Currently, AAT employs around 140 people in its 30,000 square foot facility in Chatsworth, California. After the acquisition, AAT would continue to operate in the same location with no changes in the current management. Moreover, there will be no significant staff turnover.
Transaction Closing
- As of now, the transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions.
- HEICO expects the transaction to close immediately after the receipt of antitrust clearance and satisfaction of the closing conditions. However, a clear date has not been mentioned.
Last Close Stock Review
At the closing bell, on Friday, August 18, 2017, HEICO's stock climbed 1.26%, ending the trading session at $82.87. A total volume of 210.46 thousand shares have exchanged hands, which was higher than the 3-month average volume of 180.12 thousand shares. The Company's stock price skyrocketed 12.35% in the last three months, 26.67% in the past six months, and 40.57% in the previous twelve months. Moreover, the stock soared 34.27% since the start of the year. The stock is trading at a PE ratio of 41.17 and has a dividend yield of 0.19%. The stock currently has a market cap of $6.39 billion.
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SOURCE: Pro-Trader Daily