Satair to sell its OEM activities at a favorable price to focus its business

Satair is announcing the sale of its OEM activities to the US company B/E Aerospace at a total price of USD 162 million (approx. DKK 870 million) on a debt free basis with a net profit of approx. USD 65 million (approx. DKK 350 million).

The divestment is part of a strategic process and represents Satair’s exit from the market for fasteners and related components used in aircraft production. Satair’s OEM business is one of the leading European suppliers to OEMs, but recent declining revenue and profit combined with a consolidation in the market made Satair’s management believe that the business and its employees would face better long-term pros-pects for development under a new owner. Management believes that the OEM business has found that in B/E Aerospace and that the transaction represents considerable value for Satair’s shareholders.

The divested activities contributed USD 104 million in revenue in FY 2009/10, representing 25% of Group sales. The transaction will significantly strengthen Satair's balance sheet, taking the Group from a net debt position of approx. USD 90 million to a net cash position of approx. USD 60 million. The proceeds will also allow the Group to continue to pursue acquisitions and fund growth in the Aftermarket.

Agreement with B/E Aerospace
Satair has signed an agreement for the sale of its OEM activities to B/E Aerospace at a total price of USD 162 million. The sale includes the current activities of Satair’s OEM segment as well as the Group’s sales of hardware and electrical lamps from its Aftermarket segment. The divestment accounts for USD 104 million, or 25%, of Satair’s revenue in FY 2009/10. The parties have agreed on October 27, 2010 as the closing date for the transaction without any pending conditions.

Satair – guidance for 2010/11
Because of the transaction, starting from July 1, 2010 the OEM segment will be recognized as a discontinued activity and include the profit from the sale. Ordinary profit before tax contributed by the divested activities is expected to be approx. USD 1 million in the period until the closing date. The transaction is expected to generate a profit in the region of USD 65 million and is not expected to trigger any major tax payments.

The financial guidance for FY 2010/11 for the continuing Aftermarket activities is unchanged, but because of the divestment of the OEM activities the total financial guidance (see the release of September 14, 2010) must be ad-justed to reflect the new structure. Accordingly, the Group’s revenue guidance for FY 2010/11 is changed from USD 450-460 million to USD 350-360 million for the continuing Aftermarket activities; the EBITDA guidance is changed from approx. USD 40 million to around USD 30 million, and the pre-tax profit guidance – excluding the profit of discontinued operations - from approx. USD 30 million to approx. USD 22 million including that the financial expenses will improve by an estimated USD 2.0 million following the sale.

”I am greatly satisfied that we succeeded in signing an attractive agreement about the sale of the OEM activities, which will benefit both Satair and its shareholders. It has been increasingly difficult in recent years for Satair to run a competitive and profitable OEM business with the present scale. We believe that the price obtained for the OEM activities reflects greater value for our shareholders than could be generated under the current setup with Satair as the owner. We are pleased to have found a good buyer and continued partner in B/E Aerospace. The transformed business structure will now allow us to focus on expanding our Aftermarket activities, which we feel represent greater long-term strategic opportunities for Satair,” says John Stær, Satair’s CEO.

Steen Associates in London acted as financial advisor to Satair in this transaction.

Further information
CEO John Stær, tel.: +45 3247 0104, e-mail: jst@satair.com
CFO Michael Højgaard, tel.: +45 3247 0126, e-mail: mih@satair.com.

About B/E Aerospace
B/E Aerospace is the world’s leading provider of cabin interior products and solutions for passenger aircraft and is also the leading global distributor of aerospace fasteners. The company has leading market shares worldwide in all of its major product lines and serves virtually all of the world’s airlines, aircraft manufacturers and leasing companies through its direct global sales and customer support organizations. B/E Aerospace is listed on NASDAQ and posted USD 1.9 billion in revenue in 2009.

About Satair
Satair is among the worldwide leaders within sales and distribution of production parts and spare parts for aircraft maintenance and production. For a number of years Satair has strengthened its position within the aerospace industry by means of organic growth and acquisitions, and with its presence in Europe, North America, the Middle East and Asia Pacific Satair serves upwards of 2,500 customers all over the globe. Satair is listed on NASDAQ OMX and posted USD 407 million in revenue in 2009/10.