Aircraft parts manufacturer and engineering firm LMI Aerospace in St. Charles is acquiring Kansas City-based Valent Aerostructures in a $247 million deal.
Valent has 650 employees and several manufacturing, assembly and processing facilities in Missouri, Kansas and Oklahoma, including sites in Cuba, Washington and St. Louis.
Valent broke ground on its 85,000-square-foot plant in the Heidmann Industrial Park in September 2010. The plant was completed in 2011, and manufacturing started in 2012.
“We are excited to partner with LMI, they are a great company with a great reputation,” Perry Pecaut, general manager of the Valent Washington Division, told The Missourian Friday.
“We are also very excited about the opportunity and added capability this transaction will bring, in particular, large and complex sheet metal, stretch forming and design,” Pecaut said. “The transaction is desired by both LMI and Valent to fulfill our aligned vision.”
Pecaut said the Washington plant has approximately 163 employees.
The acquisition expands the St. Charles-based company’s machining expertise and commercial aerospace business.
LMI will pay $237 million to shareholders of privately held Valent and retain obligations of $9.7 million. Combined, the companies’ annual sales will total more than $480 million in 2013.
Machined parts and sub-assemblies for commercial aerospace companies accounted for 61 percent of Valent’s revenue in fiscal 2012, with defense, industrial and general aviation comprising the rest.
Valent makes parts for the Boeing 737 and Gulfstream G650, among other aircraft.
The deal makes sense “given the nature of the industry, and the prospects for continued stability, if not growth, in the commercial aircraft area, and likely growth in not only the large cabin but ultimately in the small cabin, business jet business,” LMI Chief Executive Ronald Saks told analysts Thursday during a conference call.
The deal, subject to regulatory approval, is expected to close by year’s end.
Charlie and Henry Newell, Valent’s co-CEOs, will take on the newly created positions of co-presidents of LMI’s Aerostructures segment, and the senior leadership team will be based in both St. Charles and Kansas City, company executives said.
“The corporate headquarters will remain here in St. Charles,” said Ed Dickinson, LMI’s vice president and chief financial officer in an interview with the St. Louis Post-Dispatch.
The acquisition comes two months after LMI said it planned to expand its St. Charles headquarters and add 100 jobs over the next five years.
LMI provides structural components, assemblies and kits for aerospace, defense and technology customers. It employs more than 300 people in St. Charles and 1,750 companywide.
LMI is evaluating the consolidation of the combined companies’ facilities.
“We see a lot of sites … there’s one in Tulsa, which both LMI and Valent have, there’s another one in Wichita, there’s one in St. Louis that is pretty close to our facility (in St. Charles), so there are some potential combinations there that will yield some significant savings,” Saks said to the Post-Dispatch.
Still, investors reportedly appeared wary about the deal, which will be financed through a new senior credit agreement. LMI shares dropped $1.21, or 6 percent, to close at $17.61.
