Sep 4 2007
Umeco plc ("Umeco"), an international provider of supply chain and repair and overhaul services and advanced composite materials primarily to the aerospace & defence industries, announces the significant expansion of its composite materials business with the acquisition of J. D. Lincoln Inc. ("Lincoln") for an initial cash consideration of $59.5 million (£30.2 million) on a cash and debt free basis. Additional cash consideration of up to $15.0 million is payable based on the EBITDA of Lincoln in the twelve months after completion.
Lincoln, a privately owned business based at two sites in California, formulates and manufactures a range of pre-preg materials primarily used by aerospace tier 2 suppliers for the manufacture of composite interior structures of commercial aircraft. It is therefore highly complementary to Umeco's existing aerospace composites activities which are focused on the airframe. Lincoln has a wide range of qualifications, including those recently added for the Boeing 787 and the Airbus 380.
In the year ended 31 December 2006 Lincoln generated a profit before tax of $0.2 million after making non-recurring payments to the vendors of $6.0m million. The gross assets of Lincoln as at 31 December 2006 were $6.2 million. The acquisition is expected to be earnings enhancing in the current financial year.
Clive Snowdon, Chief Executive of Umeco plc, said:
"This acquisition is our largest since that of the Advanced Composites Group in 2004, and represents a major investment in our composites activities.
"Lincoln is growing strongly, through its expanding range of new applications and qualifications and with the continuing growth of the civil aerospace industry. The composites world is entering a new era, with more aircraft manufacturers using the light weight, durable properties of composites for a wider range of applications. With the addition of Lincoln, Umeco Composites is even better placed to capitalise on these opportunities in the future."
Scott Lincoln, currently Vice President Operations of Lincoln, will become President of Lincoln on completion of the acquisition and is expected to stay with the business for a minimum of four years, reporting to Andrew Moss, Chief Executive of Umeco Composites. The other two shareholders, JD Lincoln and Mike Burkitt, are expected to remain with the business in senior management roles for at least the first year following completion of the acquisition.
The acquisition, which will be funded through Umeco's recently increased debt facilities, is subject to regulatory clearance under Hart Scott Rodino and Exon-Florio and is expected to complete within the next 45 days.