Vector Aerospace Corporation

Vector Aerospace Corporation

April 01, 2008 11:57 ET

UK Acquisition Closes-Global Growth Platform for Vector Aerospace

TORONTO, ONTARIO--(Marketwire – April 1, 2008) - Vector Aerospace Corporation (TSX:RNO) (Vector) announced today that its wholly-owned subsidiary, Vector Aerospace International Limited, has completed the acquisition of the United Kingdom Ministry of Defence (MOD) Defence Aviation and Repair Agency (DARA) Rotary Wing and Components businesses for consideration of (pnds stlg)17 million. The assets acquired include net working capital of (pnds stlg)13.5 million.

The Fleetlands Rotary business, which provides maintenance, repair and overhaul support for the MOD Chinook (CH-47), Lynx and Sea King helicopters, will be renamed Vector Aerospace Helicopter Services Fleetlands. The Almondbank Components business, which provides maintenance, repair and overhaul and component support for these and other helicopter and fixed wing platforms within the United Kingdom, both for MOD and other customers, will be renamed Vector Aerospace Component Services Almondbank.

The acquisition expands Vector's customer base, provides access to new markets in the defence sector, adds maintenance, repair and overhaul (MRO) skills and capabilities and offers potential to build a European centre of excellence in helicopter maintenance.

The unaudited revenue of the DARA acquired business for the twelve months ended March 31, 2008 as indicated by the seller is approximately (pnds stlg)80 million (Cdn $160 million). The acquisition is expected to make positive earnings contributions to Vector for the balance of 2008. It is management's objective that operating margins of the acquired businesses will be consistent with Vector's overall results after an integration period. This integration is expected to take eighteen to twenty four months. and is expected to involve various cash outlays.

"The servicing of helicopter structures, components and engines is a core competency for Vector. We have a breadth of MRO capabilities within our Canadian rotary wing division, including military helicopters", said Donald Jackson, Chairman, President and Chief Executive Officer of Vector Aerospace Corporation. "The DARA facilities offer a significant opportunity to extend our core expertise in helicopter maintenance and military service across our existing and newly acquired business units and to add value for our customers."

Vector Aerospace Corporation, an independent provider of aviation repair and overhaul, supplies services to commercial and military customers for various types of gas turbine engines, components and helicopter structures from facilities in Canada, the United States, the United Kingdom and South Africa. The Company's shares trade on the Toronto Stock Exchange under the symbol RNO.

This news release contains certain information that may constitute forward looking information within the meaning of applicable securities laws. Among other things, information concerning Vector's anticipated customer base and markets, earnings, operating margins and the likely period required to integrate DARA is forward looking information. Forward looking information is based on certain factors and assumptions regarding, among other things, DARA customers continuing to remain customers of the acquired business after the acquisition, that earnings will remain consistent with historical figures, and the accuracy of the DARA historical figures. While Vector considers the assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking information is subject to certain factors, including risks and uncertainties that could cause actual events to differ materially from what is currently expected. These factors include, without limitation, global and local political and economic factors, and future demand for Vector's services. Readers should also refer to Vector's continuous disclosure materials filed with Canadian Securities Regulatory Authorities for additional information with respect to certain of these risk factors. A discussion of risk factors is contained in Vector's 2007 Annual Report which is available on Vector's website and on SEDAR. Readers should not place undue importance on forward looking information and should not rely upon this information as of any other date. While Vector may elect to, Vector is under no obligation and does not undertake to update or revise this information at any particular time, except as required by law.

Contact Information

  • Vector Aerospace Corporation
    Donald K. Jackson
    Chairman, President & CEO
    (416) 925-1143
    Vector Aerospace Corporation
    Randal L. Levine
    Senior Vice-President and Chief Financial Officer
    (416) 925-1143