Bombardier plans to acquire Triumph’s Global 7500 wing program

posted on 25th January 2019 by Omar

Bombardier has announced it is entering a definitive agreement to acquire the Global 7500 wing program from Triumph Group. Acquired operations will be incorporated into Bombardier’s Aerostructures and Engineering Services segment.

This will strengthen Bombardier’s position as an aerostructures manufacturer, securing the production ramp-up and long-term success of Bombardier’s flagship business jet.

Danny Di Perna, president of Bombardier Aerostructures and Engineering Services, said: “This acquisition is a perfect strategic fit for Bombardier Aerostructures. It will allow us to bring our extensive technical expertise to one of the industry’s biggest growth programs, while solidifying our position as a leading wing provider. We look forward to welcoming the Triumph employees to Bombardier and ensuring the success of the Global 7500 program.”

To support a seamless transition of wing production and deliveries for the Global 7500 program—which successfully entered into service in December 2018—Bombardier will enter into a lease agreement for Triumph’s Red Oak, Texas, facility and continue to operate the production line with the same employees currently supporting the program.

The acquisition of the program’s assets and obligations for a nominal cash consideration is expected to close in the first quarter of 2019, subject to certain closing conditions. Bombardier will assume ongoing working capital investments and usual costs associated with the program’s production ramp-up, expected to fall within Bombardier’s consolidated 2019 EBIT before special items and free cash flow guidance ranges, and 2020 objectives.

On a business segment level, Aerostructures revenue guidance for 2019 is adjusted upwards to between $2.25 billion and $2.50 billion, this reflects additional intersegment revenues. The segment’s 2019 EBIT margin before special items guidance is also adjusted by approximately 7.5 percent, reflecting marginal earnings from these additional sales during the program ramp-up. For 2020, the EBIT margin before special items objective of 9 percent to 11 percent remains unchanged.

At Business Aircraft, the 2019 EBIT margin before special items guidance of approximately 7.5 percent remains unchanged. Business Aircraft now targets 50 basis points of margin growth to approximately 8 percent, the low-end of the previously provided objective, reflecting the short-term impact of maturing the Global 7500 wing production process for 2020.