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Senior PLC To Acquire Spencer Aerospace In A $60 Mln Deal

U.K.-based Senior plc (SNR), engaged in the business of aerospace and defense components worldwide, on Thursday announced the signing of a definitive agreement to acquire substantially all of the assets of California-based Spencer Aerospace Manufacturing, LLC, a unit of Pivotal Manufacturing Group, LLC.

Senior has agreed to pay 48 million pounds ($60 million) for Spencer Aerospace, comprising an initial consideration of 24 million pounds ($30 million) in cash at completion and a further 24 million pounds ($30 million) 12 months after completion. An additional 32 million pounds ($40 million) is potentially payable in milestone amounts, dependent on the financial performance of Spencer Aerospace, during the period between completion of the acquisition and 31 December 2026. The final earnout milestone would become payable upon Spencer Aerospace's annual revenue reaching $40 million, representing revenue growth to more than 300 percent of expected 2022 revenue of $12 million.

The Group expects to benefit from future tax relief valued at approximately 10 million pounds($13 million).

The acquisition is expected to generate a return on invested capital in excess of Senior's cost of capital in the third full year following acquisition.

The acquisition is scheduled to complete in the third quarter of 2022. The transaction would be funded using the Group's existing borrowing facilities and is expected to be accretive to adjusted earnings per share in the first full year of ownership.

Shares of Senior plc were last traded at 127.80 pence, down 3 pence or 2.29 percent from the previous close.

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