Bombardier divesting aerostructures operations via Credit Suisse, sources say

02 July 2019 - 09:48 am UTC

by Claudia Montoto in Chicago and Richard Tekneci in London

Bombardier is exploring a sale of its Belfast and Morocco aerostructures businesses with financial advisor Credit Suisse, said two sources familiar with the matter.

 

Marketing materials have been sent to prospective buyers, said three additional sources familiar with the matter. In addition to Belfast and Morocco, Bombardier has included a Dallas facility in the multi-country divestiture package, said one of the sources.

 

Combined, the operations generate north of USD 100m of EBITDA, said two of the sources. The bulk of this is generated by the company’s Belfast operation, according to two of the other sources.

 

In May, Bombardier announced the creation of Bombardier Aviation, which would focus the company’s aerostructure activity around its Montreal, Mexico and recently acquired Red Oak, Texas facilities. It concurrently announced its intention to divest its Belfast and Morocco aerostructure businesses.

 

Per the company’s annual information form for the year ended 31 December 2018, Bombardier’s aerostructures operations included manufacturing and engineering in Montréal, Canada; Belfast, Northern Ireland; Querétaro, Mexico; and Casablanca, Morocco. This is in addition to its maintenance, repair and overhaul (MRO) facilities in Dallas, Texas and Belfast, according to filings.

 

Asked for comment on the divestiture, a company spokesperson gave the following statement via email: “Bombardier will take the necessary time to find the right buyer: one that will operate responsibly and help our operations in both Northern Ireland and Morocco achieve their full growth potential. All discussions with interested parties remain confidential.”

 

Credit Suisse declined to comment.

 

Airbus, Aviation Industry Corporation of China (AVIC), Commercial Aircraft Corporation of China (COMAC), Spirit Aerosystems, Melrose Industries’ GKN, Aernnova and Triumph Group have been reported as possible buyers for the business. In addition to these prospective acquirers, two of the sources pointed to French aerostructures makers Latecoere and Daher as other potential suitors.

 

In addition to strategics, private equity firms are also likely to show interest in the aerostructures package, said two of the sources.

 

In January, Bombardier announced the purchase of Triumph Group’s Global 7500 wing manufacturing operations in Red Oak, Texas, for a “nominal cash consideration.” The deal closed in February.

 

Last week, the company announced an agreement to sell its Canadair regional jet program, CRJ, to Mitsubishi Heavy Industries for USD 550m. The deal is projected to close in the first half of 2020.