LMI Aerospace to Buy Valent Aerostructures
In an SEC filing and press release Thursday, LMI Aerospace (NAS: 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 (NYS: 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.
The article LMI Aerospace to Buy Valent Aerostructures originally appeared on Fool.com.Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.