Accenture has entered into an agreement to acquire the corporate advisory and aviation consulting businesses of Seabury Group.
“Airlines are having to innovate to respond to changing customer expectations, digital disruption and revenue and cost pressures,” said Jonathan Keane, managing director of Accenture’s Aviation practice. “The aviation expertise that Seabury will bring to Accenture will complement our global capabilities, solutions and services.”
Seabury’s corporate advisory practice focuses on restructuring distressed aviation companies through strategic planning and cost reduction. Seabury’s consulting practice focuses on fleet, network, commercial, maintenance, airports, cargo and human capital improvements.
“Seabury aims to deliver significant value to the airline industry through a combination of industry expertise, analytical techniques, data and proven tools,” said John Luth, CEO at Seabury. “Our combined business marks an important step for the aviation industry by bringing innovation enhancements to market with speed and agility. I am proud of what the team of professionals at Seabury have accomplished over the years in building and supporting the resiliency and growth of the global airline industry.”
The business acquired from Seabury will become part of Accenture’s global aviation practice. Approximately 120 employees will be joining Accenture, including Luth.
Sander van ‘t Noordende, group chief executive of Accenture’s Products operating group said, “With digital transformation forcing the aviation industry to rethink its business and operating models, we expect continued strong demand for consulting services in this industry. This acquisition will enhance our ability to accelerate the pace of transformation our clients need and to deliver the industry-specific strategies that our clients are increasingly seeking to drive competitiveness and differentiation.”
Meanwhile, Safran announced yesterday that it has entered into exclusive negotiations for the acquisition of Zodiac Aerospace, which manufacturers aircraft systems, seats and cabins, through an agreed public offer of €29.47 per share and a subsequent merger on the basis of 0.485 Safran shares for one Zodiac Aerospace share. Prior to and conditional upon the merger, Safran would distribute a special dividend of €5.50 per share to its existing shareholders.
The transaction would create a global leader in aircraft equipment, allying the market leading positions, expertise, technologies and talents of both Safran and Zodiac Aerospace. The new entity would combine Safran’s capabilities in landing gear, wheels and brakes, nacelles, power systems, actuation and avionics, with Zodiac Aerospace’s leading positions in seats, cabin interiors, power distribution, lighting, fuel, oxygen and fluid systems and safety equipment.
In electrical systems, Zodiac Aerospace’s assets would reinforce Safran’s portfolio of technologies and position the group ideally for future developments towards the “more electrical aircraft”.
On a pro forma basis, including Safran’s propulsion business, the combined group would have around 92,000 employees (of which more than 45,000 in France), c. €21.2bn in adjusted revenues and c. €2.7bn in adjusted recurring operating income.
Safran has already identified €200m p. a. of cost synergies, of which 50% should be achieved in year 1 and 90% in year 2, enabling the transaction to meet Safran’s RoCE goal in three years. Synergies should come from savings in procurement and SG&A and the optimization of the combined group’s footprint. Beyond identified cost synergies, Safran would enable Zodiac Aerospace’s seats and interiors business to accelerate their recovery and progress towards or above their historical margin levels.
The transaction would be expected to have a double-digit accretive effect on earnings per share as of the first full fiscal year of consolidation.
Safran will finance the cash portion of the transaction and its special dividend with a combination of cash on hand, including future proceeds from the disposals of Safran Identity & Security, existing committed undrawn facilities and a €4bn fully underwritten bridge loan. Upon completion of the transaction, Safran would target an investment grade profile with a targeted adjusted net debt / adjusted EBITDA ratio around 2.5x. After the completion of the transaction, Safran would maintain its practice of distributing an annual dividend amounting to approximately 40 per cent of adjusted net income.
Bank of America Merrill Lynch and Lazard acted as financial advisors to Safran, BDGS served as legal counsel, and Bank of America Merrill Lynch acted as bridge underwriter. BNP Paribas and Rothschild acted as financial advisors to Zodiac Aerospace and Bredin Prat served as legal counsel.Date: January 20, 2017