Vector Aerospace will maintain its separate identity as a stand-alone MRO (maintenance, repair and overhaul) company even after it is acquired by Eurocopter Holdings, according to Vector CEO Declan O’Shea. In late March, the parent company of the helicopter OEM announced a deal to acquire Canada-based Vector for $625 million, pending two-thirds shareholder approval as well as regulatory approval in Canada and the UK.
Vector, which began independent operations in 1998 after CHC Helicopter spun off its in-house MRO as a separate public entity, had been in play since late last year when it hired Scotia Capital to pursue “strategic options” for the company. With a net debt of only $3 million and consistent double-digit earnings growth, Vector was seen as a particularly attractive acquisition target. The purchase valuation of $13 per share represents a substantial premium over recent share price–more than 80 percent higher than December trading.
On a conference call following the proposed sale announcement, O’Shea said that even after the acquisition closes, Vector will remain an “arm’s-length” multiplatform service provider, but that the Eurocopter purchase would give Vector “global access to new markets” currently served by Eurocopter parent EADS. “[Eurocopter has] a large footprint in parts of the globe where we do not have a presence,” O’Shea said. Vector currently operates facilities in Africa, Canada, the UK and the U.S., has revenues of approximately $500 million, and employs 2,500. Military contracts represent 52 percent of Vector’s revenues, O’Shea said. Overall, 60 percent of Vector’s revenues come from engine MRO activity.
On the surface, the acquisition appears to be a good fit for Eurocopter, which has made no secret of its intention to expand the services portion of its business. A Eurocopter spokesman told AIN that the Vector acquisition will give the company a “one-stop shop approach that more of our customers are asking for” and represents “an outstanding opportunity to implement significant synergies” between Eurocopter, Vector and EADS’s MRO Seca. However, he said Vector will “remain an independent MRO service provider, keeping its branding.”