AIR » Topics » 7. Acquisitions

This excerpt taken from the AIR 10-K filed Jul 16, 2009.

7. Acquisitions

        On April 2, 2007, we acquired Brown International Corporation ("Brown"), a privately held defense contractor that provides engineering, design, manufacturing and systems integration services. Brown operates as part of our Structures and Systems segment. The purchase price was approximately $26,700 and was paid in cash.

        On December 3, 2007, we acquired Summa Technology, Inc. ("Summa"), a leading provider of high-end sub-systems and precision machining, fabrication, welding and engineering services. Summa operates as part of our Structures and Systems segment. The purchase price was approximately $71,000 and was paid in cash.

        On March 5, 2008, we acquired Avborne Heavy Maintenance, Inc. ("Avborne") and a related entity. Avborne, an independent provider of aircraft heavy maintenance checks, modifications, installations and painting services to commercial airlines, international cargo carriers and major aircraft leasing companies, operates as part of our Maintenance, Repair and Overhaul segment. The purchase price was approximately $40,000 and included a cash payment of $15,000 and the assumption of a $25,000 industrial revenue bond.

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Table of Contents


AAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

7. Acquisitions (Continued)

        Our cost to acquire Brown, Summa and Avborne has been allocated to the assets and liabilities acquired based on fair values. We have allocated the purchase price as follows:

Cash

  $ 1,200  

Accounts receivable

    41,600  

Inventory

    7,900  

Prepaid expenses

    2,400  

Property, plant and equipment

    18,300  

Identifiable intangibles

    45,900  

Goodwill

    46,600  

Other assets

    1,100  

Accounts payable

    (19,500 )

Accrued liabilities

    (7,800 )

Industrial revenue bond

    (25,000 )

        The following unaudited pro forma information is provided for acquisitions assuming the Brown, Summa and Avborne acquisitions occurred as of the beginning of fiscal year 2007:

 
  For the Year Ended May 31,  
 
  2008   2007  

Net sales

  $ 1,483,114   $ 1,210,993  

Operating income

    140,493     100,328  

Net income

    77,061     58,178  

Earnings per share:

             
 

Basic

  $ 2.07   $ 1.60  
 

Diluted

  $ 1.80   $ 1.39  
These excerpts taken from the AIR 10-K filed Jul 11, 2008.

7. Acquisitions

        On January 12, 2007, we acquired substantially all of the assets of Reebaire Aircraft, Inc. ("Reebaire"), a regional airframe maintenance, repair and overhaul facility located in Hot Springs, Arkansas. This acquisition increases our regional maintenance, repair and overhaul capacity in North America. The purchase price was $11,800 and was paid in cash.

        On April 2, 2007, we acquired Brown International Corporation ("Brown"), a privately held defense contractor that provides engineering, design, manufacturing and systems integration services. Brown operates as part of our Structures and Systems segment. The purchase price was approximately $26,700 and was paid in cash.

58


AAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollars in thousands, except per share amounts)

7. Acquisitions (Continued)

        Our cost to acquire Reebaire and Brown has been allocated to the assets and liabilities acquired based on estimated fair values. We have allocated the purchase price as follows:

Accounts receivable   $ 15,600  
Inventory     600  
Equipment     700  
Identifiable intangibles     9,700  
Goodwill     20,100  
Accounts payable     (6,700 )
Accrued liabilities     (1,500 )

        On December 3, 2007, we acquired Summa Technology, Inc. ("Summa"), a leading provider of high-end sub-systems and precision machining, fabrication, welding and engineering services. Summa operates as part of our Structures and Systems segment. The purchase price was approximately $71,000 and was paid in cash.

        On March 5, 2008, we acquired Avborne Heavy Maintenance, Inc. ("Avborne") and a related entity. Avborne is an independent provider of aircraft heavy maintenance checks, modifications, installations and painting services to commercial airlines, international cargo carriers and major aircraft leasing companies. The purchase price was approximately $40,000 and included a cash payment of $15,000 and the assumption of a $25,000 industrial revenue bond. Avborne operates as part of our Maintenance, Repair and Overhaul segment.

        We have made a preliminary purchase price allocation for the Summa and Avborne acquisitions and are in the process of obtaining final valuations for the acquired net assets.

        The following unaudited pro forma information is provided for acquisitions assuming the Brown, Summa and Avborne acquisitions occurred as of the beginning of fiscal year 2006:

 
  For the Year Ended May 31,
 
  2008
  2007
  2006
Net sales   $ 1,483,114   $ 1,210,993   $ 1,014,542
Operating income     140,493     100,328     59,784
Net income     77,061     58,178     26,622

Earnings per share:

 

 

 

 

 

 

 

 

 
  Basic   $ 2.07   $ 1.60   $ 0.80
  Diluted   $ 1.80   $ 1.39   $ 0.72

7. Acquisitions



        On January 12, 2007, we acquired substantially all of the assets of Reebaire Aircraft, Inc. ("Reebaire"), a regional airframe maintenance, repair
and overhaul facility located in Hot Springs, Arkansas. This acquisition increases our regional maintenance, repair and overhaul capacity in North America. The purchase price was $11,800 and was paid
in cash.



        On
April 2, 2007, we acquired Brown International Corporation ("Brown"), a privately held defense contractor that provides engineering, design, manufacturing and systems
integration services. Brown operates as part of our Structures and Systems segment. The purchase price was approximately $26,700 and was paid in cash.



58








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AAR CORP. AND SUBSIDIARIES



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



(Dollars in thousands, except per share amounts)



7. Acquisitions (Continued)



        Our
cost to acquire Reebaire and Brown has been allocated to the assets and liabilities acquired based on estimated fair values. We have allocated the purchase price as follows:






















































Accounts receivable $15,600 
Inventory  600 
Equipment  700 
Identifiable intangibles  9,700 
Goodwill  20,100 
Accounts payable  (6,700)
Accrued liabilities  (1,500)




        On December 3, 2007, we acquired Summa Technology, Inc. ("Summa"), a leading provider of high-end sub-systems and precision
machining, fabrication, welding and engineering services. Summa operates as part of our Structures and Systems segment. The purchase price was approximately $71,000 and was paid in cash.



        On
March 5, 2008, we acquired Avborne Heavy Maintenance, Inc. ("Avborne") and a related entity. Avborne is an independent provider of aircraft heavy maintenance checks,
modifications, installations
and painting services to commercial airlines, international cargo carriers and major aircraft leasing companies. The purchase price was approximately $40,000 and included a cash payment of $15,000 and
the assumption of a $25,000 industrial revenue bond. Avborne operates as part of our Maintenance, Repair and Overhaul segment.



        We
have made a preliminary purchase price allocation for the Summa and Avborne acquisitions and are in the process of obtaining final valuations for the acquired net assets.



        The
following unaudited pro forma information is provided for acquisitions assuming the Brown, Summa and Avborne acquisitions occurred as of the beginning of fiscal year 2006:





























































































 
 For the Year Ended May 31,
 
 2008
 2007
 2006
Net sales $1,483,114 $1,210,993 $1,014,542
Operating income  140,493  100,328  59,784
Net income  77,061  58,178  26,622


Earnings per share:

 

 


 

 

 


 

 

 


 
 Basic $2.07 $1.60 $0.80
 Diluted $1.80 $1.39 $0.72




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