Canadian training company CAE has concluded its acquisition of Bombardier's Business Aircraft Training (BAT) business for an enterprise value of US$645 million.
This acquisition expands CAE's ability to address the training market for customers operating Bombardier business jets which, at more than 4,800 aircraft, is one of the largest and most valuable in-service fleets of business aircraft in the world. The acquisition also serves to expand CAE's position in the largest and fastest growing segment of the business aviation training market, involving medium and large cabin business jets. Furthermore it provides CAE with trained staff, a customer base and an established recurring training business that is complementary to CAE's network. The Bombardier BAT business includes a fleet of full-flight simulators and training devices covering the Learjet, Challenger and Global product lines, including the latest large cabin Global 5500, 6500 and 7500 business jets.
“We are pleased to welcome Bombardier customers and employees to CAE,” says CAE president and CEO Marc Parent. “Bombardier business jet customers will have access to a seamless experience in our global network of training centres, providing the most advanced solutions on the market by leveraging our continued investments in training.”
With this agreement, CAE will add 12 Bombardier business aviation full-flight simulators located in Dallas and Montreal to its training network, including one deployment already planned for CAE's fiscal year 2021. It will then operate 29 Bombardier business aviation full-flight simulators available for training worldwide. Further growth is planned for the near to mid-term.
The acquisition is expected to provide high single digit EPS accretion for CAE within its first full year and to be free cash flow accretive as well.
CAE also concluded the issuance of term loans and $450 million of the $550 million of senior unsecured notes that were announced late last year. The remaining balance of $100 million of senior unsecured notes will be drawn for the refinancing of existing debt in December 2019.