Vector CEO says P.E.I. fine in deal

Eurocopter to buy Vector Aerospace for $625 million
By S. Ryan Quigley
Journal Pioneer
SLEMON PARK- Vector Aerospace CEO Declan O’Shea says sale to Eurocopter should be positive for the company, including its Slemon Park base.
Though there has only been a support agreement signed and the deal still has to go through shareholders, it would see Eurocopter buy the Aerospace parts company sold for $625 million or $13 per share.
The decision of which branches will go into the merger is not set yet, said O’Shea.
“In Summerside, the people and expertise we have in that plant, has created a world leader.”
The Summerside plant has excellent delivery and turn over time, also setting the standard for customer service, said O’Shea.
“We’re very, very proud of the success we’ve had in P.E.I. and we’re very proud of the reception we get in P.E.I.. It doesn’t specifically mean anything for P.E.I. except that through the global nature European Aeronautic Defense Space Company we will have access to new markets.”
The sale would open up more markets for the company as Eurocopter is a more global company, said O’Shea.
“The nature of Eurocopter and ourselves where they’re strong and where we’re strong I think is quite complimentary.”
News of the buyout came Monday morning with Vector calling a press call in the afternoon to explain the logistics.
Shares rose $1.48 to $12.83 on the Toronto Stock Exchange, building on the record closing price for Vector stock reached Thursday after the company announced it was in exclusive talks with major Dutch aircraft firm European Aeronautic Defence and Space Company N.V.
EADS subsidiary Eurocopter said Monday that it will pay cash for Vector, which provides aircraft repair and overhaul services, primarily for helicopters. The $13 per share being paid for Vector is a premium of about 15 per cent above the stock’s closing price last week.
Vector repairs gas turbine engines, components and helicopter airframes for military and commercial customers around the world. It employs about 2,500 people at factories in Canada, the United States, the United Kingdom and Africa.
Its Canadian headquarters are located in Toronto and it operates engine services divisions in Calgary and Slemon Park; a technology group in St. John’s, N.L.; as well as helicopter services operations in Langley and Richmond, B.C.
Vector’s board has approved the deal and shareholders controlling about 60 per cent of the company have agreed to tender their shares. The transaction requires regulatory approval and a minimum of 66 per cent of all shares be tendered.
Through the deal, Vector will keep its name and become Eurocopter’s main maintenance, repair and overhaul provider.
EADS, maker of the Airbus and a leading defence and military contractor worldwide, said the acquisition will help it focus on high end government and civilian customers, and expand in North America. Vector will benefit from Eurocopter’s presence in 25 countries, including operations in Asia and Latin America, the companies said.
Analyst Chris Murray of PI Financial Corp. said the 15 per cent premium being offered is in line with analyst expectations.
“Based on precedent transactions, our estimate was that the valuation would be somewhere between 12 and a quarter dollars and $13.50 so the $13 number seems appropriate to us,” Declan O’Shea said in a statement issued Monday morning. He said he believes there will be no other competing bids given the structure and pricing of the deal.
“The complementary nature of our worldwide network of subsidiaries and Vector Aerospace’s own network will enable us to develop our activities jointly, both faster and more efficiently,” Lutz Bertling, CEO of Eurocopter Holding said in a statement.
Vector has contracts with many of the world’s leading aerospace and equipment companies including several EADS subsidiaries, as well as Bell Helicopters, Boeing, General Electric and Pratt & Whitney Canada.
Vector was founded in 1998 and has grown through a series of acquisitions. It went public in 2009.