Team Infidel
Forum Spin Doctor
Wall Street Journal
April 23, 2008
Pg. B8
By David Pearson
PARIS -- European Aeronautic Defence & Space Co. further cut its exposure to the dollar and its reliance on Airbus by acquiring PlantCML, a California provider of emergency-response systems, from private-equity firm Golden Gate Capital for about $350 million.
The European aerospace and defense company has been hit in recent quarters by the dollar's fall against the euro. It makes most of its products in Europe and its cost base is largely in euros, but sells planes in dollars. The dollar has depreciated 8.7% against the euro since the start of the year and is down 15% over the past 12 months.
Airbus also said Tuesday that it raised the list prices for its aircraft, citing the weak dollar and higher metals prices. However, airlines generally negotiate discounts to list prices when buying planes.
EADS has been trying to reduce its reliance on Airbus for revenue by boosting its defense and security businesses. The plane maker accounts for about two-thirds of EADS's total revenue.
EADS said the acquisition of PlantCML, which provides platforms for airline and airport communications systems as well as emergency call centers, would boost earnings per share before fair-value amortization in the first year after the acquisition. Synergies between the two companies would add value in subsequent years, it said.
Chief Executive Louis Gallois said the acquisition will solidify the company's position in security systems and solutions and expand its industrial presence in North America.
Mr. Gallois has said that bolstering the company's credentials in the U.S. by increasing its industrial operations there is essential if EADS is to take advantage of the U.S. defense market. The company has previously said it intends to make at least one acquisition in the U.S. this year, and that it was screening small to medium-size companies.
Earlier this year, EADS and its U.S. partner, Northrop Grumman Corp., of Los Angeles, won a $40 billion Air Force contract to supply 170 airborne-refueling tankers based on the Airbus A330. As part of that deal, Airbus will set up a production line for the aircraft in Mobile, Ala.
EADS's shares fell 1%, to €15.03 ($23.94), in Paris on Tuesday.
April 23, 2008
Pg. B8
By David Pearson
PARIS -- European Aeronautic Defence & Space Co. further cut its exposure to the dollar and its reliance on Airbus by acquiring PlantCML, a California provider of emergency-response systems, from private-equity firm Golden Gate Capital for about $350 million.
The European aerospace and defense company has been hit in recent quarters by the dollar's fall against the euro. It makes most of its products in Europe and its cost base is largely in euros, but sells planes in dollars. The dollar has depreciated 8.7% against the euro since the start of the year and is down 15% over the past 12 months.
Airbus also said Tuesday that it raised the list prices for its aircraft, citing the weak dollar and higher metals prices. However, airlines generally negotiate discounts to list prices when buying planes.
EADS has been trying to reduce its reliance on Airbus for revenue by boosting its defense and security businesses. The plane maker accounts for about two-thirds of EADS's total revenue.
EADS said the acquisition of PlantCML, which provides platforms for airline and airport communications systems as well as emergency call centers, would boost earnings per share before fair-value amortization in the first year after the acquisition. Synergies between the two companies would add value in subsequent years, it said.
Chief Executive Louis Gallois said the acquisition will solidify the company's position in security systems and solutions and expand its industrial presence in North America.
Mr. Gallois has said that bolstering the company's credentials in the U.S. by increasing its industrial operations there is essential if EADS is to take advantage of the U.S. defense market. The company has previously said it intends to make at least one acquisition in the U.S. this year, and that it was screening small to medium-size companies.
Earlier this year, EADS and its U.S. partner, Northrop Grumman Corp., of Los Angeles, won a $40 billion Air Force contract to supply 170 airborne-refueling tankers based on the Airbus A330. As part of that deal, Airbus will set up a production line for the aircraft in Mobile, Ala.
EADS's shares fell 1%, to €15.03 ($23.94), in Paris on Tuesday.