Bombardier and Spirit AeroSystems Amend Purchase Agreement

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In a Form 8-K filed on October 26, 2020, Spirit AeroSystems Holdings, Inc. announced that it entered into an amendment to the definitive agreement between Spirit AeroSystems, Inc. and Spirit AeroSystems Global Holdings Limited (Spirit UK), wholly owned subsidiaries of the Company, and Bombardier Inc., Bombardier Aerospace UK Limited, Bombardier Finance Inc. and Bombardier Services Corporation (collectively, the “Bombardier Sellers”) pursuant to which Spirit UK will acquire the outstanding equity of Short Brothers plc (Shorts) and Bombardier Aerospace North Africa SAS (BANA) and Spirit will acquire substantially all the assets of the maintenance, repair and overhaul business in Dallas, Texas and assume certain liabilities of Shorts and BANA (the Acquisition).

The Amendment reduces the net proceeds purchase price payable to the Bombardier Sellers from $500 million to $275 million. Spirit will continue to make a special contribution of £100 million (approximately $130 million) to the Shorts pension scheme on the first anniversary of closing. On a U.S. GAAP basis, the net pension liabilities of the Shorts pension scheme to be assumed by Spirit are approximately $300 million (measured as of September 30, 2020). At signing on October 31, 2019, Spirit reported that the Acquisition had a total enterprise valuation of $1,090 million. The Amendment reduces the total enterprise valuation to $865 million.

“This acquisition accelerates our strategic transformation by increasing our Airbus content with the A220 composite wing and growing our aftermarket business,” says Spirit AeroSystems President and Chief Executive Officer Tom Gentile.

The parties expect to close the Acquisition on October 30, 2020.

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