Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Heroux-Devtek Jumps on Agreement to Sell Assets: Montreal Mover

July 17 (Bloomberg) -- Heroux-Devtek Inc. jumped the most in more than 23 years after the Canadian maker of landing gear agreed to sell four factories to Precision Castparts Corp. for C$300 million ($296 million).

Precision Castparts agreed to buy Heroux-Devtek’s aerostructures sites in Quebec, Mexico and Texas and its industrial products plant in Ohio, the companies said today in separate news releases. Heroux-Devtek, which is based in the Montreal suburb of Longueuil, said it expects to realize net cash proceeds of about C$230 million after taxes and expenses.

Heroux-Devtek rose 33 percent to C$10.42 at 3:59 p.m. in Toronto, its biggest daily increase since September 1988 and its highest closing price since August 2007. Earlier today, the shares touched C$11.75, a gain of 50 percent.

“Given that the company’s balance sheet is already very strong, we suspect that the company will seek to make further investments in its landing gear franchise either through additional acquisitions or through investments in bidding on new programs,” Cameron Doerksen, an analyst at National Bank Financial in Montreal, said in a note to clients. “We consider it highly likely that the company would distribute at least a portion of its excess cash back to shareholders.”

Heroux-Devtek is evaluating alternatives for the proceeds, including a “significant” distribution to shareholders and debt repayment, the company said without being more specific. The company plans to focus on growth opportunities in its landing-gear business, which has about 1,000 employees and annual sales of C$250 million.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.