Wednesday, March 24, 2010

Nashville aircraft plant gets new owner after Vought sold

The Carlyle Group agreed on Tuesday to sell its Vought Aircraft Industries Inc. subsidiary to Triumph Group Inc. for cash and stock totaling $1.44 billion.
Impact on the Nashville facility, which employs about 880 people, is expected to be "minimal," Vought spokeswoman Lynne Warne said.

"Most of Vought won't see any significant operational changes as a result of this transaction," she said.

Vought, which has a large aircraft parts manufacturing plant near Nashville International Airport, will operate as Triumph Aerostructures–Vought Aircraft Division after the deal closes in July.

The deal broadens Triumph Group's foothold as a supplier to Boeing Co. and Airbus SAS.

The purchase ends a near-decade of ownership of Vought by Washington-based Carlyle Group. The sale is among 71 announced or completed acquisitions of U.S.-based aerospace and defense assets in the past year amid the U.S. recession.

Triumph executives said the acquisition would add to Wayne, Pa.-based Triumph's earnings immediately, contributing more than $1 a share in the year through March 31, 2011, before any cost savings or expenses. It also will double annual sales based on the two companies' size and past history.

The deal should more than double annual sales.

"We see the acquisition price as attractive," Standard & Poor's equity analyst Richard Tortoriello wrote in a note to clients. "However, with sales more than doubling, we also see integration risk, and believe today's surge in (Triumph Group's) stock price brings shares near to (the) appropriate value."

Tortoriello cut his rating to hold from buy.

Earnings improve

Also Tuesday, Vought said its revenue and net income increased for the fourth quarter and all of 2009, with fourth-quarter increases "primarily due to increased sales" of components for the Boeing 747-8 aircraft.

Sales for the year increased 6 percent to $1.9 billion, and operating income was up 9 percent, to $160.4 million, the company reported.

Vought said it completed the sale of its Boeing 787 operations in South Carolina to The Boeing Co. for $590 million in the fourth quarter.

Revenue for the fourth quarter totaled $555.5 million, up 35 percent from the same period in 2008, and net income for the quarter was $47.7 million, compared with a loss of $29.9 million a year earlier.

Triumph Group operates aircraft-component manufacturing and repair facilities in 58 locations, serving commercial, business and military customers.

Dallas-based Vought makes wings and fuselages for a variety of military and civilian aircraft.

The Nashville plant builds components for some Airbus jetliners, C-130 military cargo planes, and Cessna and Gulfstream business jets.

The plant endured a four-month strike in late 2008 and early 2009.

Carlyle, which bought Vought in 2000, will hold 31 percent of the outstanding stock of Triumph Group after the sale is final. It also will get $525 million in cash from Triumph.

"We believe this is a great opportunity to become part of a larger enterprise and diversify beyond Vought's core business of aero-structures manufacturing," Warne said.

Bloomberg News contributed to this story.
Contact business writer G. Chambers Williams III at 615-259-8076 or

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