- Further supporting Flexjet's global pilot training needs to
meet increasing pilot ranks
MONTREAL, Nov. 4, 2024
/PRNewswire/ - (NYSE: CAE) (TSX: CAE) - CAE announced today that it
will increase its ownership stake in its existing SIMCOM Aviation
Training (SIMCOM) joint venture by purchasing a majority of SIMCOM
shares from Volo Sicuro for USD
$230 million, subject to customary
adjustments, to be financed with CAE's existing credit facility and
cash on hand. As part of the transaction, Flexjet, LLC, a related
party of Volo Sicuro, will retain a
minority stake in SIMCOM following the closing, expected to take
place in the coming days.
Additionally, CAE and SIMCOM will each extend their respective
exclusive business aviation training services agreement with
Flexjet and its affiliates by 5 years. This results in a remaining
exclusivity period of 15 years for both agreements.
This significant organic investment will further solidify CAE's
presence in its core business aviation training market, increase
recurring revenue streams, and reinforce its commitment to
delivering world-class training solutions in business aviation. Its
long-term exclusive training agreement with one of the world's
leading luxury private jet companies gives CAE even greater
exposure to the rapidly growing fractional jet and charter aviation
market. CAE expects this investment to be accretive to earnings and
free cash flow in the first full-year post transaction.
"We are delighted to increase our investment in this core area
and achieve majority ownership of SIMCOM to strengthen our position
in the business aviation market, as well as extend our
long-standing partnership with Flexjet, one of the leading and
fastest growing private jet companies," said Alexandre Prévost,
Division President, Business Aviation. "This highlights our
commitment to continuing to drive innovation and provide
industry-leading technology to better serve our business aviation
customers."
"CAE has been a great partner over the years, consistently
providing high-quality training and delivering a superior customer
experience to all of our pilots," said Flexjet CEO Mike Silvestro. "With this agreement, Flexjet's
1,400+ pilots will continue to have access to state-of the-art
facilities and experience world-class pilot training, enabling us
to further enhance our pilots' quality of life, both on the road,
and during a pilot's recurrent training. As demand for highly
experienced, highly skilled pilots continues to rise, best-in-class
training is essential to maintaining Flexjet's unmatched safety
standards. We look forward to our continued relationship and
collaboration with CAE and SIMCOM long into the future."
SIMCOM currently provides pilot training across multiple
business aviation aircraft platforms, leveraging CAE's innovative
suite of training equipment, including CAE 7000XR Series
full-flight simulators (FFSs) and CAE 400XR Series flight training
devices (FTDs). SIMCOM operates four training centres in
the United States, including its
most recent state-of-the-art facility in Lake Nona, Florida.
About CAE
At CAE, we equip people in critical roles with the expertise and
solutions to create a safer world. As a technology company, we
digitalize the physical world, deploying software-based simulation
training and critical operations support solutions. Above all else,
we empower pilots, cabin crew, maintenance technicians, airlines,
business aviation operators, and defence and security forces to
perform at their best every day and when the stakes are the
highest. Around the globe, we're everywhere customers need us to be
with approximately 13,000 employees in more than 240 sites and
training locations in over 40 countries. CAE represents more than
75 years of industry firsts—the highest-fidelity flight and mission
simulators as well as training programs powered by digital
technologies. We embed sustainability in everything we do. Today
and tomorrow, we'll make sure our customers are ready for the
moments that matter.
Read our FY24 Global Annual Activity and Sustainability
Report.
Follow us on Twitter: @CAE_Inc
Facebook: www.facebook.com/cae.inc
LinkedIn: www.linkedin.com/company/cae
Hashtags: #CAE; #CAEpilot
About SIMCOM
A privately-owned, comprehensive learning institution, SIMCOM
utilizes realistic simulator-based training to provide advanced
aviation training services to professional pilots, owner-operators,
Part 135 operators and maintenance personnel operating in general
aviation, regional, military, government and cargo operations
around the world. SIMCOM currently operates 40+ simulators
and flight training devices representative of a wide range of jet,
turboprop and piston powered aircraft. The company is
headquartered in Orlando,
Florida. www.simulator.com
About Flexjet
Flexjet, Inc., a global leader in private aviation, first
entered the fractional jet ownership market in 1995 and is about to
celebrate its 30th anniversary. Flexjet offers fractional jet
ownership and leasing and is the first in the world to be
recognized as achieving the Air Charter Safety Foundation's
Industry Audit Standard, is the first and only company to be
honored with 25 FAA Diamond Awards for Excellence, upholds an
ARG/US Platinum Safety Rating, a 4AIR Bronze Sustainable Rating and
is certified at Stage 2 with IS-BAO. Red Label by Flexjet, a market
differentiator, which features an ultra-modern fleet, flight crews
dedicated to a single aircraft and the LXi Cabin Collection of
interiors. To date there are nearly 50 different interior designs
across its fleet, which includes the Embraer Phenom 300 and Praetor
500, Bombardier Challenger 350/3500, the Gulfstream G450 and G650. Flexjet's European
fleet includes the Embraer Praetor 600 and the Gulfstream G650. Flexjet's helicopter division
sells fractional, lease and on-demand charter access to its fleet
of owned, operated and maintained Sikorsky S-76 helicopters which
boast 55,000 hours of safe flying certified by Wyvern and ARG/US
and serving locations throughout the northeastern United States, United Kingdom and Florida. Flexjet is a member of the
Directional Aviation family of companies. For more details on
innovative programs and flexible offerings, visit
www.flexjet.com or follow us on Instagram @FlexjetInc.
Caution concerning forward-looking statements
This press release includes forward-looking statements about the
increase by CAE of its ownership stake in the SIMCOM joint venture
(the Transaction), the anticipated benefits and expected
impacts therefrom on CAE's strategic and operational plans and
financial results, including with respect to the Transaction's
anticipated impact on CAE's earnings and free cash flow, the
expected terms, conditions and completion of the Transaction,
including the extension of exclusivity periods under any existing
business aviation training services agreements, the timing for
completion and the anticipated financing sources for the
Transaction, as well as CAE's activities, events and developments
that it expects to or anticipates may occur in the future
including, for example, statements about CAE's vision, strategies,
market trends and outlook, future revenues, earnings, cash flow
growth, profit trends, growth capital spending, expansions and new
initiatives, including initiatives that pertain to environmental,
social and governance (ESG) matters, financial obligations,
available liquidities, expected sales, general economic and
political outlook, inflation trends, prospects and trends of an
industry, expected annual recurring cost savings from operational
excellence programs, our management of the supply chain, estimated
addressable markets, demands for CAE's products and services, our
access to capital resources, our financial position, the expected
accretion in various financial metrics, the expected capital
returns to shareholders, our business outlook, business
opportunities, objectives, development, plans, growth strategies
and other strategic priorities, and our competitive and leadership
position in our markets, the expansion of our market shares, CAE's
ability and preparedness to respond to demand for new technologies,
the sustainability of our operations, and other statements that are
not historical facts.
Since forward-looking statements and information relate to
future events or future performance and reflect current
expectations or beliefs regarding future events, they are typically
identified by words such as "anticipate", "believe", "could",
"estimate", "expect", "intend", "likely", "may", "plan", "seek",
"should", "will", "strategy", "future" or the negative thereof or
other variations thereon suggesting future outcomes or statements
regarding an outlook. All such statements constitute
"forward-looking statements" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995. By their
nature, forward looking statements require CAE to make assumptions
and are subject to inherent risks and uncertainties associated with
CAE's business which may cause actual results in future periods to
differ materially from results indicated in forward-looking
statements. While these statements are based on management's
expectations and assumptions regarding historical trends, current
conditions and expected future developments, as well as other
factors that CAE believes are reasonable and appropriate in the
circumstances, readers are cautioned not to place undue reliance on
these forward-looking statements as there is a risk that they may
not be accurate. The forward-looking statements contained in this
press release describe our expectations as of November 4, 2024 and, accordingly, are subject to
change after such date.
Important risks that could cause such differences include risks
relating to the Transaction, such as all or part of the intended
benefits therefrom not being realized, failure to satisfy the
conditions to the completion of the Transaction or delay in
completing it and uncertainty regarding the length of time required
to complete the Transaction, the impact of the announcement of the
Transaction on CAE's relationships with third parties, including
commercial counterparties, suppliers, employees and competitors,
strategic relationships, operating results and businesses
generally, the occurrence of an event which would allow the parties
to terminate their obligations, commitments and undertakings
pursuant to the Transaction documentation, changes in the terms of
the Transaction, the failure by the parties to fulfill their
obligations, commitments and undertakings pursuant to the
Transaction documentation. If the proposed Transaction is not
completed for any reason, there is a risk that the announcement of
such Transaction and the dedication of substantial resources of CAE
to the completion thereof could have a negative impact on our
operating results and business generally, and could have a material
adverse effect on our current and future operations, financial
condition and prospects. In addition, failure to complete the
proposed Transaction for any reason could materially negatively
impact the market price of our securities.
Additional risks that could cause such differences include, but
are not limited to, strategic risks, such as geopolitical
uncertainty, global economic conditions, competitive business
environment, original equipment manufacturer (OEM) leverage and
encroachment, inflation, international scope of CAE's business,
level and timing of defence spending, constraints within the
civil aviation industry, CAE's ability to penetrate new markets,
research and development activities, evolving standards and
technology innovation and disruption, length of sales cycle,
business development and awarding of new contracts, strategic
partnerships and long-term contracts, risk that CAE cannot assure
investors that it will effectively manage its growth, estimates of
market opportunity and competing priorities; operational risks,
such as supply chain disruptions, program management and execution,
mergers and acquisitions, business continuity, subcontractors,
fixed price and long-term supply contracts, CAE's continued
reliance on certain parties and information, and health and safety;
cybersecurity risks; talent risks, such as recruitment, development
and retention, ability to attract, recruit and retain key personnel
and management, corporate culture and labour relations; financial
risks, such as availability of capital, customer credit risk,
foreign exchange, effectiveness of internal controls over financial
reporting, liquidity risk, interest rate volatility, returns to
shareholders, shareholder activism, estimates used in accounting,
impairment risk, pension plan funding, indebtedness, acquisition
and integration costs, sales of additional common shares, market
price and volatility of CAE's common shares, seasonality, taxation
matters and adjusted backlog; legal and regulatory risks, such as
data rights and governance, U.S. foreign ownership, control or
influence mitigation measures, compliance with laws and
regulations, insurance coverage potential gaps, product-related
liabilities, environmental laws and regulations, government audits
and investigations, protection of CAE's intellectual property and
brand, third-party intellectual property, foreign private issuer
status, and enforceability of civil liabilities against CAE's
directors and officers; ESG risks, such as extreme climate events
and the impact of natural or other disasters (including effects of
climate change) and more acute scrutiny and perception gaps
regarding ESG matters; reputational risks; and technological risks,
such as information technology and reliance on third-party
providers for information technology systems and infrastructure
management. The foregoing list is not exhaustive and other unknown
or unpredictable factors could also have a material adverse effect
on the performance or results of CAE. Additionally, differences
could arise because of events announced or completed after the date
of this press release. More information about the risks and
uncertainties affecting CAE's business can be found in the
Management's Discussion & Analysis for the year ended
March 31, 2024 and the Management's
Discussion & Analysis for the quarter ended June 30, 2024. Accordingly, readers are cautioned
that any of the disclosed risks could have a material adverse
effect on CAE's forward-looking statements. Readers are also
cautioned that the risks described above and elsewhere in this
press release, and in the documents referenced herein, are not
necessarily the only ones CAE faces; additional risks and
uncertainties that are presently unknown to CAE or that CAE may
currently deem immaterial may adversely affect CAE's
business.
Except as required by law, CAE disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise.
The forward-looking information and statements contained in this
press release are expressly qualified by this cautionary
statement. In addition, statements that "we believe" and
similar statements reflect our beliefs and opinions on the relevant
subject. These statements are based on information available to us
as of the date of this press release. While we believe that
information provides a reasonable basis for these statements, that
information may be limited or incomplete. Our statements should not
be read to indicate that we have conducted an exhaustive inquiry
into, or review of, all relevant information. These statements are
inherently uncertain, and investors are cautioned not to unduly
rely on these statements.
Material Assumptions
The forward-looking statements set out in this press release are
based on certain assumptions including, without limitation: the
satisfaction of all closing conditions of the Transaction, our
ability to otherwise complete the Transaction within anticipated
time periods and at expected cost levels, management's estimates
and expectations in relation to future economic and business
conditions and other factors in relation to the Transaction, the
realization of the expected strategic, financial and other benefits
of the Transaction in the timeframe anticipated, fulfillment by the
other parties of their respective obligations, commitments and
undertakings pursuant to the Transaction documentation, prevailing
market conditions, and no material financial, operational or
competitive consequences of changes in regulations affecting CAE's
business. For additional information, including with respect to
other assumptions underlying the forward-looking statements made in
this press release, refer to the applicable reportable segment in
the Management's Discussion & Analysis for the year ended
March 31, 2024 and the Management's
Discussion & Analysis for the quarter ended June 30, 2024.
Accordingly, the assumptions outlined in this press release, and in
the documents referenced herein, and, consequently, the
forward-looking statements based on such assumptions, may turn out
to be inaccurate.
SIMCOM Contacts
CAE Contacts:
General Media:
Samantha Golinski, Vice President, Public
Affairs & Global Communications
+1-438-805-5856, samantha.golinski@cae.com
Investor Relations:
Andrew Arnovitz, Senior Vice
President, Investor Relations and Enterprise Risk Management,
+1-514-734-5760, andrew.arnovitz@cae.com
Flexjet Contact:
Susan Ruiz
Patton, Flexjet Head of External Communications,
216-333-9526 (mobile), Susan.Ruiz.Patton@flexjet.com
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SOURCE CAE Inc.