Kaman Announces Sale of Distribution Segment to Littlejohn & Co. for $700 Million in Cash
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Kaman to focus on accelerating growth of aerospace and engineered products businesses
- Sale positions Kaman with a stronger balance sheet to further invest in high margin products and enhance shareholder value
Following the completion of the transaction, Kaman will continue to design and manufacture critical components, structures, and systems for commercial and military customers. The Aerospace Segment currently operates out of fourteen facilities around the world with almost 3,000 employees and is expected to generate between
“For Kaman this transaction represents an important milestone in our portfolio transformation and the culmination of a thorough strategic review undertaken by our Board of Directors,” said
Kaman’s Distribution Segment is a leading distributor of more than six million items including electro-mechanical, bearings, power transmission, motion control and electrical and fluid power components, as well as automation and MRO supplies, to customers in virtually every industry. In addition, the business provides engineering, design and support for automation, electrical, linear, hydraulic and pneumatic systems as well as belting and rubber fabrication, customized mechanical services, hose assemblies, repair, fluid analysis and motor management. With approximately 220 locations across the U.S. and
“Kaman Distribution builds upon Littlejohn’s deep expertise investing in the distribution and industrial sectors,” said
Keating added, “Successful execution of our three platform strategy at Distribution has enabled us to drive sustainable long-term sales and profit growth. Under Littlejohn’s ownership, Distribution will continue its track record of providing value added products and services and capabilities to customers throughout
Use of Proceeds
Kaman expects to receive approximately
Approvals and Time to Close
The transaction is expected to close in the third quarter of 2019, subject to customary closing conditions and the receipt of any necessary consents and approvals.
Advisors
Conference Call
A conference call has been scheduled for later today,
About
About
Non-GAAP Measures Disclosure
Management believes that the Non-GAAP financial measures (i.e. financial measures that are not computed in accordance with Generally Accepted Accounting Principles) identified by an asterisk (*) used in this release or in other disclosures provide important perspectives into the Company's ongoing business performance. The Company does not intend for the information to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define the measures differently. We define the Non-GAAP measures used in this release and other disclosures as follows:
Adjusted Operating Income / Segment Adjusted EBITDA
Adjusted Operating Income is defined as operating income, less items that are not indicative of the operating performance of the Company's segments or corporate function for the period presented. Segment Adjusted EBITDA is defined as Adjusted Operating Income plus Depreciation and Amortization. Management uses these measures to evaluate performance period over period, to analyze underlying trends in our businesses and to assess their performance relative to their competitors. We believe that this information is useful for investors and financial institutions seeking to analyze and compare companies on the basis of operating performance.
|
QTD |
|
YTD |
|
QTD |
|
TTM |
|
|
March 29, |
|
December 31, |
|
March 30, |
|
March 29, |
|
Distribution Segment (in thousands) |
2019 |
|
2018 |
|
2018 |
|
2019 |
|
GAAP Operating Income |
$12,697 |
|
$51,529 |
|
$11,834 |
|
$52,392 |
|
Restructuring and severance |
- |
|
655 |
|
- |
|
655 |
|
Adjusted Operating Income |
a |
$12,697 |
|
$52,184 |
|
$11,834 |
|
$53,047 |
Depreciation and Amortization |
b |
3,892 |
|
14,154 |
|
3,506 |
|
14,540 |
Segment Adjusted EBITDA |
a + b |
$16,589 |
|
$66,338 |
|
$15,340 |
|
$67,587 |
Valuation Multiple |
||||||||
Purchase price |
$700,000 |
$700,000 |
||||||
Segment Adjusted EBITDA |
$66,338 |
$67,587 |
||||||
Multiple |
10.6x |
10.4x |
Risks Associated with Forward-Looking Statements
This release includes "forward looking statements" relating to the announced transactions and future operations of the Company, which can be identified by the use of words such as “will,” “expect,” “poise,” “believe,” “plans,” “strategy,” “prospects,” “estimate,” “seek,” “target,” “anticipate,” “intend,” “future,” “likely,” “may,” “should,” “would,” “could,” and other words of similar meaning in connection with a discussion of the proposed transaction or future operating or financial performance or events. These statements are based on assumptions currently believed to be valid but involve significant risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ from those expressed in the forward looking statements. Such risks and uncertainties include, among others, the ability of the parties to satisfy the conditions precedent and consummate the announced transactions; the ability of the parties to secure regulatory approvals with respect to the Hart-Scott-Rodino Antitrust Improvements Act and other applicable antitrust laws in a timely manner; the timing of consummation of the announced transactions; the ability to implement the anticipated business plans following closing and achieve anticipated benefits and savings; the ability of the parties to secure required third party consents; the ability of the Purchasers to secure the equity and debt financing required to consummate the announced transaction; and future and estimated revenues, earnings, cash flow, charges and expenditures. Additional risks and uncertainties that could cause our actual results to differ from those expressed in the forward looking statements are identified in our reports filed with the
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Source:
Kaman Corporation:
James Coogan
VP, Investor Relations
(860) 243-6342
james.coogan@kaman.com
Littlejohn & Co., LLC:
Nathaniel Garnick
Gasthalter & Co.
212-257-4170
NG@gasthalter.com