Heroux-Devtek Buys Eagle Tool & Machine Company

Canadian manufacturer of aerospace and industrial products acquired assets of Eagle Tool & Machine Co. and a subsidiary for $34 million.

MONTREAL (CP) -- Heroux-Devtek Inc. a Canadian manufacturer of aerospace and industrial products, says it has acquired the assets of Eagle Tool & Machine Co. and its subsidiary E-2 Precision Products, two privately owned U.S. companies that make precision machined components for the aerospace industry.

The value of net assets to be acquired is US$34 million, subject to post closing adjustments, the Montreal-area company said Thursday.

"Eagle Tool is a very strategic acquisition for Heroux-Devtek, as it will further strengthen relationships with our main military customers, broaden our product portfolio and yield synergies," said Gilles Labbe, president and chief executive of Heroux-Devtek.

"This transaction solidifies our position in the landing gear market by establishing a U.S. manufacturing base closer to our main customers and reaffirms Heroux-Devtek's status as the third largest landing gear manufacturer in the world."

For 2009, Eagle Tool generated sales of US$38 million and its year-end funded backlog was roughly US$125 million.

The transaction should close before the end of April and is expected to boost earnings per share by up to 10 per cent in the first year following the acquisition.

Founded in 1939, Eagle Tool makes landing gear components mainly for the military aerospace industry and also for certain commercial aerospace customers.

Bill Brougher, president of Eagle Tool and E-2, said that joining Heroux-Devtek "is very appealing to our companies."

"Heroux-Devtek's widely-recognized depth and expertise, combined with our manufacturing capabilities, will broaden the products and services we can offer to our valuable customers."

In trading on the TSX, Heroux-Devtek shares rose once cent to $5.36.

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