STAMFORD, Conn., Nov. 30, 2018 (GLOBE NEWSWIRE) -- Hexcel Corporation (NYSE:HXL) announced today that it has entered into a definitive agreement to
acquire ARC Technologies, Inc., a leading supplier of custom RF / EMI and microwave absorbing composite materials for military,
aerospace and industrial applications. The acquisition strengthens Hexcel’s existing advanced materials portfolio in structural
composites and thermoplastics and provides new opportunities for growth and market penetration.
ARC Technologies, founded in 1988, is a privately-owned manufacturer with about 170 employees
working at two locations in Amesbury, Massachusetts. The company has a wide range of capabilities for producing RF / EMI and
microwave absorbing materials and specializes in combining absorptive metallic filler compounds – including carbon, iron and
nickel-coated graphite – with a proprietary blend of polymer resins to generate various matrix materials including structural
composites and thermoplastics.
Hexcel Chairman, CEO and President Nick Stanage said, “ARC Technologies is a leader in materials science with talented people
and a culture that is a strong fit with ours. This acquisition will combine two great research and technology teams to further
develop next-generation products for both commercial and military aerospace and defense applications. Both companies are committed
to maintaining strong customer relationships focused on innovative solutions so we will be well positioned to grow and enhance the
business.”
ARC Technologies Founder & CEO Daniel P. Healey, III said, “This acquisition represents a major step in strengthening our
capabilities in RF absorbing materials, thermoplastic products and specialty composites. Hexcel has a well-known industry
reputation for producing high-performance structural materials, so the acquisition will improve our ability to offer the next
generation of aerospace materials and advanced composites to our customers. Knowing Hexcel’s corporate credibility and culture, I’m
confident that the acquisition will benefit both companies and all of our employees.”
ARC Technologies is expected to generate about $50 million in revenue in 2018. The agreed-upon purchase price is $160 million,
which represents a multiple of 11.9 times 2018 expected adjusted EBITDA. The transaction is expected to be accretive to Hexcel’s
earnings in 2019 and is subject to customary commercial and regulatory conditions and approvals. It is expected to close early in
2019.
About Non-GAAP Financial Measures and Items Affecting Comparability
“EBITDA” (net income before net interest expense, income taxes, depreciation and amortization) and “adjusted EBITDA” (EBITDA as
adjusted for cash and non-cash acquisition-related expenses, gains and losses (which may include third party fees and expenses,
integration, restructuring and consolidation expenses and amortization of acquired inventory fair value step-up) are “non-GAAP
financial measures.” Hexcel provides adjusted EBITDA guidance for ARC Technologies and does not provide a reconciliation to
the most directly comparable GAAP financial measure because of the inherent difficulty in forecasting and quantifying certain
amounts that are necessary for such reconciliation, including adjustments that could be made for acquisition-related expenses,
gains and losses and other charges reflected in the reconciliation of the non-GAAP financial measure, the amounts of which could be
material.
Forward-Looking Statements
Statements in this press release that are not statements of historical or current fact constitute
“forward-looking statements.” The “forward-looking statements” in this press release include, without limitation, statements
related to the planned acquisition of ARC Technologies and the timing and expected impact thereof, as well as the anticipated 2018
adjusted EBITDA and revenue of ARC Technologies. Such forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause actual results to be materially different. Such factors include, but are not limited
to, the failure to obtain regulatory approvals for the transaction, the failure to satisfy other closing conditions for the
transaction, unanticipated difficulties in integrating ARC Technologies’ operations into Hexcel’s operations and other factors
detailed in the Forward Looking Statements and Risk Factors sections of Hexcel’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2017 and in its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 filed with
the Securities and Exchange Commission. We do not undertake an obligation to update our forward-looking statements to reflect
future events.
About Hexcel
Hexcel Corporation is a leading advanced composites company. It develops, manufactures and markets lightweight, high-performance
structural materials including carbon fibers, specialty reinforcements, prepregs and other fiber-reinforced matrix materials,
honeycomb, adhesives, engineered core and composite structures for use in commercial aerospace, space and defense and industrial
applications.
Contact Information
Kaye Veazey | Vice President – Corporate & Marketing Communications | 203-352-0339 | Kaye.Veazey@hexcel.com
