CAE to increase ownership stake in SIMCOM Aviation Training joint venture and extend exclusive Business Aviation training agreement with Flexjet and its affiliates.
CAE announced plans to increase its stake in SIMCOM Aviation Training by purchasing majority shares from Volo Sicuro for USD $230 million. Flexjet will retain a minority stake in SIMCOM, and both CAE and SIMCOM will extend their exclusive business aviation training agreements with Flexjet and affiliates by 5 years, resulting in a 15-year remaining exclusivity period. The investment, to be financed through CAE's existing credit facility and cash, is expected to be accretive to earnings and free cash flow in the first full-year post transaction. SIMCOM operates four training centers in the United States and provides pilot training across multiple business aviation aircraft platforms.
CAE ha annunciato piani per aumentare la propria partecipazione in SIMCOM Aviation Training acquistando la maggioranza delle azioni da Volo Sicuro per USD $230 milioni. Flexjet manterrà una partecipazione di minoranza in SIMCOM, e sia CAE che SIMCOM estenderanno i loro accordi di formazione esclusiva per l'aviazione aziendale con Flexjet e le sue affiliate di 5 anni, portando a un periodo rimanente di esclusività di 15 anni. L'investimento, che sarà finanziato attraverso il credito esistente di CAE e liquidità, si prevede contribuirà agli utili e al flusso di cassa libero nel primo anno completo successivo alla transazione. SIMCOM gestisce quattro centri di formazione negli Stati Uniti e offre formazione per piloti su più piattaforme di aerei per l'aviazione aziendale.
CAE anunció planes para aumentar su participación en SIMCOM Aviation Training adquiriendo acciones mayoritarias de Volo Sicuro por USD $230 millones. Flexjet mantendrá una participación minoritaria en SIMCOM, y tanto CAE como SIMCOM extenderán sus acuerdos de formación exclusiva en aviación empresarial con Flexjet y sus afiliados por 5 años, resultando en un período de exclusividad restante de 15 años. Se espera que la inversión, que se financiará a través de la línea de crédito existente de CAE y efectivo, sea favorable para las ganancias y el flujo de caja libre en el primer año completo posterior a la transacción. SIMCOM opera cuatro centros de capacitación en los Estados Unidos y proporciona formación para pilotos en múltiples plataformas de aeronaves de aviación empresarial.
CAE는 Volo Sicuro로부터 USD $230 million에 대다수 주식을 매입하여 SIMCOM Aviation Training에서의 지분을 늘릴 계획이라고 발표했습니다. Flexjet는 SIMCOM에서 소수 지분을 유지하며, CAE와 SIMCOM은 Flexjet 및 제휴사와의 독점 비즈니스 항공 훈련 계약을 5년 연장하여 남은 독점 기간을 15년으로 늘립니다. 이 투자는 CAE의 기존 신용 시설과 현금을 통해 자금이 조달될 예정이며, 거래 후 첫 해에 수익과 자유 현금 흐름에 긍정적인 영향을 미칠 것으로 예상됩니다. SIMCOM은 미국 내 4개의 훈련 센터를 운영하며, 여러 비즈니스 항공기 플랫폼에 대한 조종사 훈련을 제공합니다.
CAE a annoncé des projets pour augmenter sa participation dans SIMCOM Aviation Training en achetant des actions majoritaires de Volo Sicuro pour USD $230 millions. Flexjet conservera une participation minoritaire dans SIMCOM, et à la fois CAE et SIMCOM prolongeront leurs accords de formation exclusive pour l'aviation d'affaires avec Flexjet et ses affiliés de 5 ans, ce qui donnera un délai d'exclusivité restant de 15 ans. Il est prévu que cet investissement, qui sera financé par la facilité de crédit existante de CAE et des liquidités, soit bénéfique pour les résultats et le flux de trésorerie libre durant la première année complète suivant la transaction. SIMCOM exploite quatre centres de formation aux États-Unis et propose une formation de pilotes sur plusieurs plateformes d'avions d'affaires.
CAE hat Pläne angekündigt, seinen Anteil an SIMCOM Aviation Training durch den Erwerb von Mehrheitsanteilen von Volo Sicuro für USD $230 Millionen zu erhöhen. Flexjet wird eine Minderheitsbeteiligung an SIMCOM behalten, und sowohl CAE als auch SIMCOM werden ihre exklusiven Geschäftsaviation-Schulungsverträge mit Flexjet und seinen Tochtergesellschaften um 5 Jahre verlängern, was einen verbleibenden Exklusivzeitraum von 15 Jahren zur Folge hat. Die Investition, die über die bestehende Kreditfazilität von CAE und Bargeld finanziert wird, wird voraussichtlich im ersten vollen Jahr nach der Transaktion zu den Erträgen und dem freien Cashflow beitragen. SIMCOM betreibt vier Schulungszentren in den Vereinigten Staaten und bietet Pilotenschulungen auf mehreren Plattformen von Geschäftsflugzeugen an.
- USD $230M strategic acquisition to increase ownership in SIMCOM Aviation Training
- 15-year exclusive training agreement extension with Flexjet
- Expected to be accretive to earnings and free cash flow in first full year
- Strengthens position in growing fractional jet and charter aviation market
- Increases recurring revenue streams
- Significant cash outlay and increased debt utilization through credit facility
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This strategic
- Enhanced recurring revenue streams through the 15-year exclusive training agreement with Flexjet
- Immediate financial benefits with expected accretion to earnings and free cash flow in the first year
- Expanded exposure to the growing fractional jet and charter aviation market
The transaction's financing through existing credit facilities and cash indicates strong liquidity position. The retention of Flexjet as a minority stakeholder helps align interests and secure long-term business relationships. This move capitalizes on the increasing demand for pilot training amid industry-wide pilot shortages and growing private aviation sector.
This deal strategically positions CAE to capitalize on the surging demand in private aviation training. With Flexjet's 1,400+ pilots requiring regular training and the broader industry facing pilot shortages, the expanded SIMCOM ownership provides CAE with greater control over a critical training infrastructure. The 15-year exclusive agreement with Flexjet ensures stable, long-term revenue while the Lake Nona facility and advanced simulation technology (CAE 7000XR Series FFSs) demonstrate significant technological advantages in the market. This positions CAE to capture increased market share in the growing business aviation sector while maintaining high training standards.
- Further supporting Flexjet's global pilot training needs to meet increasing pilot ranks
Additionally, CAE and SIMCOM will each extend their respective exclusive business aviation training services agreement with Flexjet and its affiliates by 5 years. This results in a remaining exclusivity period of 15 years for both agreements.
This significant organic investment will further solidify CAE's presence in its core business aviation training market, increase recurring revenue streams, and reinforce its commitment to delivering world-class training solutions in business aviation. Its long-term exclusive training agreement with one of the world's leading luxury private jet companies gives CAE even greater exposure to the rapidly growing fractional jet and charter aviation market. CAE expects this investment to be accretive to earnings and free cash flow in the first full-year post transaction.
"We are delighted to increase our investment in this core area and achieve majority ownership of SIMCOM to strengthen our position in the business aviation market, as well as extend our long-standing partnership with Flexjet, one of the leading and fastest growing private jet companies," said Alexandre Prévost, Division President, Business Aviation. "This highlights our commitment to continuing to drive innovation and provide industry-leading technology to better serve our business aviation customers."
"CAE has been a great partner over the years, consistently providing high-quality training and delivering a superior customer experience to all of our pilots," said Flexjet CEO Mike Silvestro. "With this agreement, Flexjet's 1,400+ pilots will continue to have access to state-of the-art facilities and experience world-class pilot training, enabling us to further enhance our pilots' quality of life, both on the road, and during a pilot's recurrent training. As demand for highly experienced, highly skilled pilots continues to rise, best-in-class training is essential to maintaining Flexjet's unmatched safety standards. We look forward to our continued relationship and collaboration with CAE and SIMCOM long into the future."
SIMCOM currently provides pilot training across multiple business aviation aircraft platforms, leveraging CAE's innovative suite of training equipment, including CAE 7000XR Series full-flight simulators (FFSs) and CAE 400XR Series flight training devices (FTDs). SIMCOM operates four training centres in
About CAE
At CAE, we equip people in critical roles with the expertise and solutions to create a safer world. As a technology company, we digitalize the physical world, deploying software-based simulation training and critical operations support solutions. Above all else, we empower pilots, cabin crew, maintenance technicians, airlines, business aviation operators, and defence and security forces to perform at their best every day and when the stakes are the highest. Around the globe, we're everywhere customers need us to be with approximately 13,000 employees in more than 240 sites and training locations in over 40 countries. CAE represents more than 75 years of industry firsts—the highest-fidelity flight and mission simulators as well as training programs powered by digital technologies. We embed sustainability in everything we do. Today and tomorrow, we'll make sure our customers are ready for the moments that matter.
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About SIMCOM
A privately-owned, comprehensive learning institution, SIMCOM utilizes realistic simulator-based training to provide advanced aviation training services to professional pilots, owner-operators, Part 135 operators and maintenance personnel operating in general aviation, regional, military, government and cargo operations around the world. SIMCOM currently operates 40+ simulators and flight training devices representative of a wide range of jet, turboprop and piston powered aircraft. The company is headquartered in
About Flexjet
Flexjet, Inc., a global leader in private aviation, first entered the fractional jet ownership market in 1995 and is about to celebrate its 30th anniversary. Flexjet offers fractional jet ownership and leasing and is the first in the world to be recognized as achieving the Air Charter Safety Foundation's Industry Audit Standard, is the first and only company to be honored with 25 FAA Diamond Awards for Excellence, upholds an ARG/US Platinum Safety Rating, a 4AIR Bronze Sustainable Rating and is certified at Stage 2 with IS-BAO. Red Label by Flexjet, a market differentiator, which features an ultra-modern fleet, flight crews dedicated to a single aircraft and the LXi Cabin Collection of interiors. To date there are nearly 50 different interior designs across its fleet, which includes the Embraer Phenom 300 and Praetor 500, Bombardier Challenger 350/3500, the
Caution concerning forward-looking statements
This press release includes forward-looking statements about the increase by CAE of its ownership stake in the SIMCOM joint venture (the Transaction), the anticipated benefits and expected impacts therefrom on CAE's strategic and operational plans and financial results, including with respect to the Transaction's anticipated impact on CAE's earnings and free cash flow, the expected terms, conditions and completion of the Transaction, including the extension of exclusivity periods under any existing business aviation training services agreements, the timing for completion and the anticipated financing sources for the Transaction, as well as CAE's activities, events and developments that it expects to or anticipates may occur in the future including, for example, statements about CAE's vision, strategies, market trends and outlook, future revenues, earnings, cash flow growth, profit trends, growth capital spending, expansions and new initiatives, including initiatives that pertain to environmental, social and governance (ESG) matters, financial obligations, available liquidities, expected sales, general economic and political outlook, inflation trends, prospects and trends of an industry, expected annual recurring cost savings from operational excellence programs, our management of the supply chain, estimated addressable markets, demands for CAE's products and services, our access to capital resources, our financial position, the expected accretion in various financial metrics, the expected capital returns to shareholders, our business outlook, business opportunities, objectives, development, plans, growth strategies and other strategic priorities, and our competitive and leadership position in our markets, the expansion of our market shares, CAE's ability and preparedness to respond to demand for new technologies, the sustainability of our operations, and other statements that are not historical facts.
Since forward-looking statements and information relate to future events or future performance and reflect current expectations or beliefs regarding future events, they are typically identified by words such as "anticipate", "believe", "could", "estimate", "expect", "intend", "likely", "may", "plan", "seek", "should", "will", "strategy", "future" or the negative thereof or other variations thereon suggesting future outcomes or statements regarding an outlook. All such statements constitute "forward-looking statements" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. By their nature, forward looking statements require CAE to make assumptions and are subject to inherent risks and uncertainties associated with CAE's business which may cause actual results in future periods to differ materially from results indicated in forward-looking statements. While these statements are based on management's expectations and assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that CAE believes are reasonable and appropriate in the circumstances, readers are cautioned not to place undue reliance on these forward-looking statements as there is a risk that they may not be accurate. The forward-looking statements contained in this press release describe our expectations as of November 4, 2024 and, accordingly, are subject to change after such date.
Important risks that could cause such differences include risks relating to the Transaction, such as all or part of the intended benefits therefrom not being realized, failure to satisfy the conditions to the completion of the Transaction or delay in completing it and uncertainty regarding the length of time required to complete the Transaction, the impact of the announcement of the Transaction on CAE's relationships with third parties, including commercial counterparties, suppliers, employees and competitors, strategic relationships, operating results and businesses generally, the occurrence of an event which would allow the parties to terminate their obligations, commitments and undertakings pursuant to the Transaction documentation, changes in the terms of the Transaction, the failure by the parties to fulfill their obligations, commitments and undertakings pursuant to the Transaction documentation. If the proposed Transaction is not completed for any reason, there is a risk that the announcement of such Transaction and the dedication of substantial resources of CAE to the completion thereof could have a negative impact on our operating results and business generally, and could have a material adverse effect on our current and future operations, financial condition and prospects. In addition, failure to complete the proposed Transaction for any reason could materially negatively impact the market price of our securities.
Additional risks that could cause such differences include, but are not limited to, strategic risks, such as geopolitical uncertainty, global economic conditions, competitive business environment, original equipment manufacturer (OEM) leverage and encroachment, inflation, international scope of CAE's business, level and timing of defence spending, constraints within the civil aviation industry, CAE's ability to penetrate new markets, research and development activities, evolving standards and technology innovation and disruption, length of sales cycle, business development and awarding of new contracts, strategic partnerships and long-term contracts, risk that CAE cannot assure investors that it will effectively manage its growth, estimates of market opportunity and competing priorities; operational risks, such as supply chain disruptions, program management and execution, mergers and acquisitions, business continuity, subcontractors, fixed price and long-term supply contracts, CAE's continued reliance on certain parties and information, and health and safety; cybersecurity risks; talent risks, such as recruitment, development and retention, ability to attract, recruit and retain key personnel and management, corporate culture and labour relations; financial risks, such as availability of capital, customer credit risk, foreign exchange, effectiveness of internal controls over financial reporting, liquidity risk, interest rate volatility, returns to shareholders, shareholder activism, estimates used in accounting, impairment risk, pension plan funding, indebtedness, acquisition and integration costs, sales of additional common shares, market price and volatility of CAE's common shares, seasonality, taxation matters and adjusted backlog; legal and regulatory risks, such as data rights and governance,
Except as required by law, CAE disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. The forward-looking information and statements contained in this press release are expressly qualified by this cautionary statement. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this press release. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
Material Assumptions
The forward-looking statements set out in this press release are based on certain assumptions including, without limitation: the satisfaction of all closing conditions of the Transaction, our ability to otherwise complete the Transaction within anticipated time periods and at expected cost levels, management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Transaction, the realization of the expected strategic, financial and other benefits of the Transaction in the timeframe anticipated, fulfillment by the other parties of their respective obligations, commitments and undertakings pursuant to the Transaction documentation, prevailing market conditions, and no material financial, operational or competitive consequences of changes in regulations affecting CAE's business. For additional information, including with respect to other assumptions underlying the forward-looking statements made in this press release, refer to the applicable reportable segment in the Management's Discussion & Analysis for the year ended March 31, 2024 and the Management's Discussion & Analysis for the quarter ended June 30, 2024. Accordingly, the assumptions outlined in this press release, and in the documents referenced herein, and, consequently, the forward-looking statements based on such assumptions, may turn out to be inaccurate.
SIMCOM Contacts
CAE Contacts:
General Media:
Samantha Golinski, Vice President, Public Affairs & Global Communications
+1-438-805-5856, samantha.golinski@cae.com
Investor Relations:
Andrew Arnovitz, Senior Vice President, Investor Relations and Enterprise Risk Management,
+1-514-734-5760, andrew.arnovitz@cae.com
Flexjet Contact:
Susan Ruiz Patton, Flexjet Head of External Communications,
216-333-9526 (mobile), Susan.Ruiz.Patton@flexjet.com
View original content:SOURCE CAE Inc.
FAQ
How much is CAE paying for the majority stake in SIMCOM Aviation Training?
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