-
Strengthens leadership position of Company as the largest provider of
aftermarket parts for the Canadian and US transit bus industry
-
Added value through combined scale, footprint and overhead utilization
and management expects transaction to be accretive to earnings and cash
flow
WINNIPEG, March 1, 2013 /CNW/ - (TSX:NFI; TSX:NFI.DB.U) New Flyer Industries Inc. ("New Flyer" or the
"Company") announced today that it has acquired certain assets from
Daimler Buses North America ("DBNA") relating to its Orion aftermarket
parts business for heavy-duty transit buses.
DBNA's Orion parts business generated revenue in 2012 of approximately
$54 million, a portion of which was from supporting the nearly 10,000
Orion buses currently in operation in Canada and the United States. The
purchase price for the assets was approximately $29million (which includes an estimated $6.5million for the purchase of accounts receivable) and is subject to
post-closing adjustments for working capital which are normal and
customary for these types of transactions. The purchase price was
funded by using proceeds from the recently announced equity investment
by Marcopolo S.A., one of the world's leading global bus manufacturers,
which made the first tranche of its investment in New Flyer, totaling
C$51.7 million, on February 15, 2013.
Under the terms of the transaction with DBNA, New Flyer has:
-
acquired DBNA's Orion aftermarket parts inventory, accounts receivable
and assumed certain obligations under its parts contracts with transit
customers,
-
acquired an exclusive license to use DBNA's proprietary part designs for
Orion buses in connection with New Flyer's aftermarket parts business,
and
-
entered into an arrangement under which New Flyer will be the exclusive
supplier of parts required by DBNA for customer warranty support, under
Orion bus purchase contracts and pre-closing parts contracts.
The companies have also entered into a transition services agreement for
an interim period following the purchase, during which time the
business will be prudently and efficiently integrated into New Flyer's
business systems and four existing parts distribution centers in Canada
and the US.
"This announcement follows on the co-operative relationship we have
developed with Daimler Buses North America," explained Paul Soubry, New
Flyer's President and Chief Executive Officer. "In the last eight
months we have assumed two Orion bus manufacturing contracts: one for
New York City Transit and the other for King County Metro in Seattle
for a total of 194 firm bus orders and options for an additional 291
buses (for a total of 485 equivalent units)." Mr. Soubry went on to
explain, "This acquisition is consistent with our strategic plan and
enables New Flyer to further diversify and grow our aftermarket parts
business."
Bernd Voigt, President and CEOof Daimler Buses North America added, "It was important to DBNA that we
have a market leader such as New Flyer supporting the Orion buses
currently in service in Canada and the US with high quality parts and
proven service. Further, DBNA required a reliable source of spare
parts as we fulfill our bus warranty and support obligations to Orion
customers under bus purchase contracts. Together with New Flyer, we
will make sure a robust service infrastructure continues to provide a
high level of service and support."
New Flyer will provide further details and insights into its transition
and integration plan as part of the next investor call scheduled for
9:00 am (Eastern time) on March 22, 2013, following the release of its
2012 year-end results. Orion customers will receive direct
communication from DBNA and New Flyer regarding the transition of the
business, and are asked to continue working directly with the Orion
Aftermarket Parts Service Organization as usual, until further advised.
CIBC World Markets acted as financial advisor to the Company.
NOTE: All dollar amounts are stated in US currency, unless otherwise
noted.
About New Flyer
New Flyer is the leading manufacturer of heavy-duty transit buses in
Canada and the United States. The Company's three manufacturing
facilities - in Winnipeg, MB; St. Cloud, MN and Crookston, MN - are all
ISO 9001, ISO 14001 and OHSAS 18001 certified. The Company currently
operates a parts fabrication facility in Elkhart, IN and four parts
distribution centers in Winnipeg, MB; Brampton, ON; Erlanger, KY and
Fresno, CA. The Company also operates a service center in Arnprior,
ON.
With a skilled workforce of over 2,200 employees, New Flyer is a
technology leader, offering the broadest product line in the industry,
including drive systems powered by clean diesel, LNG, CNG and electric
trolley as well as energy-efficient diesel-electric hybrid vehicles.
New Flyer has delivered over 32,000 heavy-duty buses in Canada and the
United States. All products are supported with an industry-leading,
comprehensive parts and service network. Further information is
available on New Flyer's web site at www.newflyer.com.
The common shares and convertible unsecured subordinated debentures of
New Flyer are traded on the Toronto Stock Exchange under the symbols
NFI and NFI.DB.U, respectively.
Forward-Looking Statements
This press release may contain forward-looking statements relating to
expected future events, including the parts supply and licensing
arrangements between New Flyer and DBNA, the integration of the
acquired business into New Flyer's existing business, the
diversification and growth of New Flyer's aftermarket parts business
and the accretive effects of the transaction to earnings and cash flow
of New Flyer. Although the forward-looking statements contained in this
press release are based upon what management believes to be reasonable
assumptions, investors cannot be assured that actual results will be
consistent with these forward-looking statements, and the differences
may be material. Actual results may differ materially from management
expectations as projected in such forward-looking statements for a
variety of reasons, including risks related to acquisitions, joint
ventures and other strategic relationships with third parties, market
and general economic conditions and economic conditions of and funding
availability for customers to purchase buses and to purchase parts or
services, customers may not exercise options to purchase additional
buses, the ability of customers to terminate contracts for convenience
and the other risks and uncertainties discussed in the materials filed
with the Canadian securities regulatory authorities and available on
SEDAR at www.sedar.com. Due to the potential impact of these factors, the Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise, unless required by applicable law.
SOURCE: New Flyer Industries Inc.
