Florida-based B/E Aerospace, aerospace manufacturing industry leaders of aircraft cabin interior products and distributor of aerospace fasteners and consumables in the aerospace industry, signed a deal to acquire UFC Aerospace Corp. for $400 million in cash.
B/E Aerospace triggers for earnings boost
B/E Aerospace’s move to acquire the supply chain management and inventory logistics company UFC Aerospace Corp would help boost its earnings guidance for 2012. Supply chain magazines have been a great source, to collect information on B/E Aerospace. Shares of B/E Aerospace bumped up about 2.49 percent or 99 cents, reaching to $40.78.
Well, the business news indeed made investors applause. Amin J. Khoury, Chairman and Chief Executive Officer of B/E Aerospace said, “The acquisition of UFC Aerospace Corp substantially expands our capability to offer creative and differentiated supply chain solutions, value-added inventory logistics services such as 3PL and 4PL programs, and customized kitting solutions, as well as further expanding our broad consumables product offering. This acquisition supports our commitment to provide the best and broadest portfolio of aerospace consumables products and services to our customers.”
The Wellington based B/E Aerospace has its largest American operation near Smith Reynolds Airport in Winston-Salem, employing more than 800 workers in its commercial aircraft segment.
Amin J. Khoury also mentioned, “Our future revenue growth will be fueled by key positions on critical customer platforms, our ability to continue to respond to customer demand for same day service, and our ability to respond to aerospace customer trends toward outsourcing more and more key elements of the supply chain through complex logistic solutions. B/E Aerospace is uniquely positioned for all of these.”
The UFC Aerospace Corp
UFC Aerospace Corp, an innovative provider of complex supply chain management and inventory logistics solutions to aerospace original equipment manufacturers, currently distributes over 150,000 stock keeping units including fasteners, chemicals, paints, sealants, tooling, and duct/bent tubing assemblies to over 1,000 customers. UFC influences its long-term relationships with key customers to create differentiated supply chain solutions.
Analysts Reviews on B/E Aerospace
A Deutsche Bank analyst, Myles Walton, said he expects investors to be encouraged by the B/E Aerospace and UFC Aerospace supply chain deal, not only because of the increased earnings guidance, but also how management continues to show an ability to use excess cash for accretive acquisitions. Myles Walton also said he expects another strong financial report from B/E Aerospace in the fourth quarter.
Carter Leake, an analyst with BB&T Capital Markets, expected B/E Aerospace would continue to be aggressive with company deals given it has had a decade of astute acquisitions.
Carter Leake also believes, “It is perfectly positioned to capitalize on the two most positive trends in commercial aerospace: the near-doubling of new build widebody production rates over the next three to four years, and the long-awaited turn in global aftermarket demand.”