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LMI Aerospace to Buy Valent Aerostructures

In an SEC filing and press release Thursday, LMI Aerospace (Nasdaq: LMIA  ) announced that it has agreed to purchase privately held Valent Aerostructures, a provider of complex, structural components, major sub-assemblies and machined parts for OEM and Tier 1 airframe manufacturers in the aerospace and defense industries.

Initial consideration for the deal will be approximately $237 million, less retained indebtedness of approximately $12.6 million. In addition, if Valent hits certain financial goals over the coming years, LMI could pay an additional amount of up to $40 million in "earn out."

Payment will be in the form of LMI common shares and cash, with the likely outcome, absent a steep fall in the stock price of LMI, being $15 million worth of shares, and the balance in cash.

The deal is subject to customary closing conditions, including regulatory approval. Royal Bank of Canada (NYSE: RY  ) has agreed to provide up to $300 million in financing to fund the transaction, which will be essential to the deal. LMI currently has only a little over $100,000 in the bank. LMI and Valent are based in Missouri.


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Related Tickers

10/21/2016 3:59 PM
LMIA $7.40 Down -0.03 -0.40%
LMI Aerospace CAPS Rating: ***
RY $63.41 Down -0.07 -0.11%
Royal Bank of Cana… CAPS Rating: ***