PTB Group (ASX: PTB) will acquire Prime Turbines for US$21 million (A$31.3 million) and aviation spare parts from provider CT Aerospace for US$8.5 million (A$12.66 million) under deals announced today.
Prime Turbines is a US-based independent aircraft engine maintenance, repair and overhaul company, with the acquisition expected to expand on PTB’s existing presence in the US aviation market.
“Prime Turbines is well known to PTB and its 30-plus years of expertise on major turboprop and turboshaft engine platforms fits seamlessly into PTB’s existing US based core competency,” PTB chief executive officer and managing director Stephen Smith explained.
“Prime Turbines’ locations in Dallas, Phoenix, and Pittsburgh provide an increased footprint from which to serve the industry.”
He added Prime Turbines’ expertise in maintenance, repair and overhaul services for the T53 and Bell Drivetrain expands PTB’s service offering.
Funding the deal
Additionally, PTB will purchase around US$8.5 million worth of inventory from CT Aerospace, with this specific acquisition to be funded via a five-year zero interest amortising loan from the vendor.
Meanwhile, to fund the takeover of Prime Turbines, PTB has launched an equity raising to secure up to A$34.9 million via the issue of about 50.6 million shares at A$0.69 each.
The equity raising comprises a fully committed placement to raise A$12.9 million and a fully underwritten 1 for 2.35 pro-rata non-renounceable entitlement offer of fully paid ordinary shares in PTB. The underwritten entitlement will be available to eligible shareholders and will raise up to A$22 million.
Subject to raising the funds and other conditions, PTB expects to complete the acquisitions in late February.
At the same time as announcing the acquisitions, PTB noted its FY 2020 guidance of profit before tax between A$5.6 million and A$6 million remains.
Additionally, the acquisitions are expected to boost PTB’s revenues to A$90 million, with pro forma combined group earnings before interest tax depreciation and amortisation of A$16 million anticipated.
PTB also revealed today it would be distributing a fully franked dividend of A$0.025 for every ordinary share held. Payment of the dividend is scheduled for 2 March 2020.