10-Year Airline and Business Jet Pilot Demand Outlook
CIVIL AVIATION TRAINING SOLUTIONS
Transaction summary
Transaction
Overview
■ Two main transaction elements ("Transaction"):
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1. Acquisition of Bombardier Business Aircraft Training ("BAT") business for enterprise value of US$645 million
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EV / one-year Forward EBITDA (1) (2) multiple of approximately 9x
EV/LTM (Jun-18) Bombardier BAT Adjusted EBITDA (1) (3) of approximately 10x
2. Monetization of existing future royalties at a discount for US$155 million ("Monetization")
Bombardier BAT business EBITDA (1) growing at a double-digit pace
High single-digit-percentage earnings accretion for CAE in first full year of ownership
Free cash flow accretive in first full year of ownership
Expected
Financial
Impact
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Accretive to Civil segment operating margin by 100-150bps
Expected cost synergies of US$6.0 million by the end of the first fiscal year post closing
CAE's outlook for 13% ROCE (4) by FY2022 maintained
Acquisition financed through a combination of:
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New committed term loans of up to US$400M
17
Fully
Committed
Financing
Other Terms
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Balance from cash on hand and drawing on existing credit facility
Net-debt-to-capital (4) ratio of 42% pro-forma at closing is within CAE's target leverage range of 35-45%
Plan to return to lower end of target leverage range within 24-36 months post completion of the Transaction
Investment grade financial profile maintains financial flexibility and access to debt markets at attractive terms
■ Transaction subject to customary regulatory approvals.
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Closing of the Monetization transaction expected by end of FY19 and the Bombardier BAT acquisition by H2 CY2019
(1) EBITDA: earnings before net finance expense, income tax expense, amortization and depreciation
(2) Forecasted EBITDA reflecting the ramp up of newly deployed simulators and expected cost synergies
(3) Adjusted for lease costs and one-time / non-recurring items
(4) Refer to Section 5- Non-GAAP and other financial measures in our first quarter ended June 30, 2018 MD&A for definition and more details.
CAE Inc. Proprietary Information and/or Confidential
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