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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event Reported):
August 4, 2023
HEICO CORPORATION
(Exact name of registrant as specified in its charter)
Florida |
|
001-04604 |
|
65-0341002 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification Number) |
3000 Taft Street, Hollywood, Florida 33021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area
code: (954) 987-4000
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, $.01 par value per share |
|
HEI |
|
New York Stock Exchange |
Class A Common Stock, $.01 par value per share |
|
HEI.A |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ☐
Item 8.01. Other Events.
On August 4, 2023, HEICO Corporation, a Florida corporation,
issued a press release announcing that it has completed its previously announced acquisition of Wencor Group. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: August 4, 2023 |
By: |
/s/ Carlos L. Macau, Jr. |
|
|
Carlos L. Macau, Jr. |
|
|
Executive Vice President – |
|
|
Chief Financial Officer and Treasurer |
2
Exhibit 99.1
Date: |
August
4, 2023 |
|
|
|
|
|
|
Contact: |
Eric A. Mendelson |
(954) 744-7555 |
|
|
Carlos L. Macau, Jr. |
(954) 987-4000 |
|
HEICO CORPORATION COMPLETES WENCOR GROUP ACQUISITION
HOLLYWOOD, FL and PEACHTREE CITY, GA -- HEICO Corporation (NYSE: HEI.A
and HEI) today announced that it has completed its previously announced acquisition of Wencor Group (“Wencor”) from affiliates
of Warburg Pincus LLC and Wencor’s management for $1.9 billion in cash and $150 million in HEICO Class A Common Stock1 paid at closing, or $2.05 billion in the aggregate.
The transaction is HEICO’s largest ever in purchase price, as
well as revenues and income acquired. Wencor has joined HEICO’s Flight Support Group.
HEICO stated that it expects the highly synergistic acquisition to
be accretive to its earnings within the year following the closing. Further, HEICO anticipates it will continue to achieve its often-articulated
growth objectives in the years following the closing.
Founded in 1955, Wencor is a large commercial and military aircraft
aftermarket company offering factory-new FAA-approved aircraft replacement parts, value-added distribution of high-use commercial &
military aftermarket parts and aircraft & engine accessory component repair and overhaul services.
Wencor is based in Peachtree City, GA and provides its parts and services
internationally, employing approximately 1,000 team members in 19 facilities around the United States. HEICO currently employs approximately
9,000 Team Members at over 100 facilities worldwide. Wencor’s customers include airlines worldwide, aircraft maintenance repair
and overhaul companies, military agencies and defense contractors.
Wencor’s parts and repairs are found in hydraulic, pneumatic,
electronic and electro-mechanical, cockpit and galley systems throughout numerous aircraft models and provide Wencor’s customers
with significant cost savings.
HEICO previously announced that Wencor was estimated to generate approximately
$724 million and $153 million in adjusted proforma revenues and EBITDA, respectively, in calendar year 20232,
and is currently exceeding those initial expectations. Further, HEICO expects to receive estimated tax benefits of approximately $75
million that will be realized through fiscal year 2038.
1 | A fixed number of 1,137,628 shares of HEICO Class A Common Stock
were issued at closing. |
2 | Wencor’s projected revenues and EBITDA are adjusted and on a
proforma basis to take into account an acquisition it completed in February 2023 and certain diligence adjustments. |
Following the acquisition’s completion, HEICO anticipates its
net debt-to-EBITDA leverage ratio will be below 3:1 and will return to its historical levels within roughly a year to eighteen months
after the acquisition, before taking into account future acquisitions and other possible capital deployment activities.
HEICO stated that it anticipates Wencor and HEICO will share best practices
between their well-performing businesses and believes its Flight Support Group will achieve meaningful synergies from the acquisition,
driving continued meaningful growth for its businesses and advancement opportunities for both HEICO and Wencor Team Members. HEICO’s Flight
Support Group has successfully achieved significant financial and other synergies from acquisitions of other businesses over many years.
Laurans A. Mendelson, HEICO’s Chairman and Chief Executive Officer,
along with Eric A. Mendelson, HEICO’s Co-President and Chief Executive Officer of its Flight Support Group, together remarked, “Wencor
is a perfect and highly complementary fit with HEICO, as the combination will be transformative, providing a unique and growing portfolio
of proprietary cost-saving solutions for our airline and OEM customers. We welcome Shawn Trogdon, Wencor’s talented CEO who will
continue to lead Wencor, and the phenomenal Wencor Team to the HEICO family. HEICO has a long history of appreciation for its Team Members
by providing an excellent working environment, advancement opportunities and participation as HEICO owners through our 401k plan.”
Shawn Trogdon, Wencor’s Chief Executive Officer, remarked, “This
is an exciting day for Wencor and our talented team in having the opportunity to join a world-class organization like HEICO. It’s
unique to find two companies who align so well on culture, values, and commitment to their customers, suppliers, and Team Members. This
alignment and combination brings an unmatched value proposition in our industry that will help to further accelerate growth,
innovation, and development of highly reliable cost-saving solutions for our customers. I’m extremely proud of our team’s
accomplishments and we look forward to continuing our journey as part of HEICO. I want to thank the Warburg Pincus team for their support
and partnership over the years, which has helped enable our success.”
Dan Zamlong, Managing Director at Warburg Pincus remarked, “We
would like to congratulate both the Wencor and HEICO teams on this milestone. Wencor has developed into a leading provider of aftermarket
solutions to the aerospace and defense industries during our ownership period and is well positioned for future growth as part of HEICO.
We have a tremendous amount of appreciation for the hard work and dedication to building a high-quality company with a compelling value
proposition by every Wencor team member and wish them continued success as part of the HEICO team.”
HEICO has two classes of common stock traded on the NYSE. Both classes,
the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between
the share classes is the voting rights. The Class A Common Stock (HEI.A) carries 1/10 vote per share and the Common Stock (HEI) carries
one vote per share. The stock symbols for HEICO’s two classes of common stock on most websites are HEI.A and HEI. However, some
websites change HEICO’s Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa.
About HEICO
HEICO Corporation is engaged primarily in the design, production, servicing
and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics
industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO’s
customers include a majority of the world’s airlines and overhaul shops, as well as numerous defense and space contractors and military
agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO,
please visit our website at www.heico.com.
About Warburg Pincus
Warburg Pincus LLC is a leading global growth investor. The firm
has more than $83 billion in assets under management. The firm’s active portfolio of more than 250 companies is highly
diversified by stage, sector, and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable
companies with sustainable value. Warburg Pincus has been an active investor in the aerospace and defense sectors with current and
former investments including Accelya, Aquila Air Capital, CAMP Systems, Consolidated Precision Products, Extant Aerospace, Inmarsat,
Quest Global, TransDigm and Wencor Group. Founded in 1966, Warburg Pincus has raised 21 private equity and 2 real estate funds,
which have invested more than $112 billion in over 1,000 companies in more than 40 countries. The firm is headquartered in New York
with offices in Amsterdam, Beijing, Berlin, Hong Kong, Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São
Paulo, Shanghai, and Singapore. For more information, please visit www.warburgpincus.com. Follow us on LinkedIn.
Forward-Looking
Statements
Certain statements in this press release constitute forward-looking
statements, which are subject to risks, uncertainties and contingencies, including HEICO’s ability to successfully and timely integrate Wencor into HEICO’s Flight Support Group and
generate cost-savings for customers and synergies, to realize the transaction’s anticipated tax benefits, to achieve the expected
improvements in HEICO’s EBITDA and net debt-to-EBITDA ratio and to continue to achieve its growth objectives, and also including Wencor’s
ability to achieve its projected proforma adjusted revenue and EBITDA in 2023 and beyond. HEICO’s actual results may differ materially
from those expressed in or implied by those forward-looking statements as a result of factors including, but not limited to: the severity,
magnitude and duration of public health threats, such as the COVID-19 pandemic (“Health Emergencies”); HEICO’s liquidity and
the amount and timing of cash generation; lower commercial air travel caused by Health Emergencies and their aftermath, airline fleet
changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements,
which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions,
reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors,
which could reduce our sales; our ability to introduce new products and services at profitable pricing levels, which could reduce our
sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing
costs and delay sales; our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals,
and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates;
economic conditions, including the effects of inflation, within and outside of the aviation, defense, space, medical, telecommunications,
and electronics industries, which could negatively impact our costs and revenues; and defense spending or budget cuts, which could reduce
our defense-related revenue. Parties receiving this material are encouraged to review
all of HEICO’s filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and
Form 8-K. HEICO undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information,
future events or otherwise, except to the extent required by applicable law.
Non-GAAP Financial Measures
To provide additional information about HEICO’s
projected results, HEICO has discussed in this press release, for future periods following the completion of the Wencor acquisition, its
projected net debt-to-EBITDA ratio (calculated as net debt divided by EBITDA). Projected EBITDA is calculated as projected net income
attributable to HEICO adjusted for depreciation and amortization expense, net income attributable to noncontrolling interests, interest
expense and income tax expense. Projected net debt is calculated as projected total debt less projected cash and cash equivalents. These
measures are not prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
These non-GAAP measures are included to supplement
HEICO’s financial information presented in accordance with GAAP and because HEICO uses such measures to monitor and evaluate the performance
of its business and believes the presentation of these measures enhance an investor’s ability to analyze trends in HEICO’s business and
to evaluate HEICO’s performance relative to other companies in its industry. However, these non-GAAP measures have limitations and should
not be considered in isolation or as a substitute for analysis of HEICO’s financial results as reported under GAAP.
These non-GAAP measures are not in accordance
with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies.
In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These measures should only
be used to evaluate HEICO’s results of operations in conjunction with their corresponding GAAP measures.
With respect to our projected EBITDA, projected net debt, and
projected net debt-to-EBITDA ratio for future periods, a
reconciliation of these non-GAAP measures to the corresponding GAAP measures of net income attributable to HEICO, total debt, and
total debt-to-net income attributable to HEICO, are not available without unreasonable effort due to the variability and complexity
of the reconciling items that we add-back to net income attributable to HEICO to determine EBITDA. The variability of these items
may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking
statement of income prepared in accordance with GAAP that would be required to produce such a reconciliation.
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HEICO (NYSE:HEI.A)
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부터 4월(4) 2024 으로 5월(5) 2024
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과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024