- Establishes CAE as a technology leader in digital flight and
crew operations
- Transaction aligns with Sabre's strategic vision to create a
new marketplace for personalized travel
MONTREAL and SOUTHLAKE,
Texas, Oct. 28, 2021 /CNW/ -
CAE (NYSE: CAE) (TSX: CAE) and Sabre Corporation (NASDAQ: SABR)
announced today an agreement for CAE to acquire Sabre's AirCentre
airline operations portfolio (AirCentre) – a highly valuable suite
of flight and crew management and optimization solutions. The
agreement, which is valued at US$ 392.5 million excluding
post-closing adjustments, includes the Sabre AirCentre product
portfolio, related technology and intellectual property as well as
the transfer of AirCentre's highly talented workforce. AirCentre
generated approximately US$150
million revenue in the 2019 calendar year (pre-pandemic),
and approximately US$55 million
EBITDA1 for the same period. The closing of the
transaction is expected in the first quarter of calendar 2022 and
is subject to customary conditions and regulatory approvals.
The acquisition will further expand CAE's reach across its broad
customer base beyond pilot training and establish the company as a
technology leader in the growing marketplace for industry-leading,
digitally-enabled flight and crew operations solutions. CAE expects
that the transaction will be mid-single-digit percentage
EPS2 accretive, and even higher free cash
flow3 accretive, for CAE within the first year
post-closing.
"Sabre's AirCentre business is highly valued by many of the
world's leading airlines, nearly all of whom are customers of CAE
today. This acquisition will significantly expand CAE's
capabilities across a large airline customer base and allows us to
deliver on our objective to help our civil aviation customers
operate their businesses with the highest levels of efficiency and
precision," said Marc Parent, CAE's
President and CEO. "We are committed to investing and innovating in
digital flight and crew operations, an expansion area for our
business. The acquisition will also enhance CAE's capability set
with the addition of 500 talented employees, the majority of which
are personnel with software development and digital expertise.
We look forward to welcoming AirCentre employees from around
the globe and are excited to work with our new colleagues to
accelerate the innovation of AirCentre's products as well as CAE's
ongoing technological and digital transformation. This transaction
will mark the ninth accretive acquisition for CAE since the
COVID-19 pandemic began, further effecting the company's intent to
emerge from the pandemic larger, more resilient, and more
profitable."
For Sabre, the divestiture demonstrates the company's commitment
to its previously-announced strategic initiatives and is another
step toward fulfilling its vision to create a new marketplace for
personalized travel. Through this transaction and other strategic
changes executed over the past year, Sabre will be better
positioned for incremental revenue opportunities going forward.
"This divestiture is an important strategic move that will allow
us to focus on our forward-looking plans and on accelerating our
growth as we continue to transform our business and build on our
strong momentum over the past three years," said Sean Menke, Sabre President and CEO. "By selling
AirCentre to a company committed to growth in the area of airline
operations, we can create more value for Sabre, its shareholders
and AirCentre customers while we remain laser-focused on the areas
of our business that will help drive revenue opportunities for
Sabre and our customers – now and in the future."
Uniting airlines and crew in a single, interconnected and
growing digital ecosystem
Over the past three years, CAE has been steadily unifying the
digital flight operations ecosystem with the goal of delivering a
holistic suite of solutions designed to improve operations and
enhance the flight and crew experience.
The acquisitions of Merlot and RB Group in December 2020 and April
2021 marked milestones in CAE's journey to pioneer the
development of a digital flight operations ecosystem. And in
July 2021 CAE announced Project
Resilience, a multi-year innovation program to develop the
technologies of tomorrow, including digitally immersive solutions
leveraging data and artificial intelligence in civil aviation. For
more information about CAE's current digital crew management
solutions, visit these pages.
CAE Presentation slides: CAE is making available on its
website at www.cae.com/investors presentation slides regarding CAE
for its analysts and investors. They are accessible via this
link.
About Sabre's AirCentre
Sabre's AirCentre Operations
business includes approximately 500 employees located in 13
countries, including 5 hubs. It delivers software solutions to more
than 150 airline customers, with a portfolio that includes:
- Crew Management: Enables enhanced long-term planning,
innovative tracking and management, and disruption management
decision support to help carriers manage crew schedules and keep
crew members informed with real-time data
- Flight Management: Allows airlines to manage the core functions
of flight operations to deliver efficient flight plans and support
increased productivity
- Movement Manager: Helps airlines to gain a competitive
advantage by optimizing the use of aircraft and operational plans
to help meet commercial objectives such as protecting schedules,
reducing disruptions and minimizing passenger impact
- Airport Management: Manages airport operations such as
planning, gate assignments and staffing to support increased
operational efficiency, help optimize costs and improve the
customer experience
- In-flight: Spans all aspects of service planning, meal
ordering, forecasting, operations, materials management, financial
controls and reporting
About Sabre Corporation
Sabre Corporation is a leading
software and technology company that powers the global travel
industry, serving a wide range of travel companies including
airlines, hoteliers, travel agencies and other suppliers. The
company provides retailing, distribution and fulfilment solutions
that help its customers operate more efficiently, drive revenue and
offer personalized traveler experiences. Through its leading travel
marketplace, Sabre connects travel suppliers with buyers from
around the globe. Sabre's technology platform manages more than
$260B worth of global travel spend
annually. Headquartered in Southlake,
Texas, USA, Sabre serves customers in more than 160
countries around the world. For more information
visit www.sabre.com.
About CAE
CAE is a high technology company, at the
leading edge of digital immersion, providing solutions to make the
world a safer place. Backed by a record of more than 70 years of
industry firsts, we continue to reimagine the customer experience
and revolutionize training and operational support solutions in
civil aviation, defence and security, and healthcare. We are the
partner of choice to customers worldwide who operate in complex,
high-stakes and largely regulated environments, where successful
outcomes are critical. As testament to our customers' ongoing needs
for our solutions, over 60 percent of CAE's revenue is recurring in
nature. We have the broadest global presence in our industry, with
more than 11,000 employees, 180 sites, and training locations in
over 35 countries. www.cae.com
Follow us on Twitter: CAE_Inc
Facebook: www.facebook.com/cae.inc
LinkedIn: www.linkedin.com/company/cae
Hashtags: #CAE; #CAEpilot; #CAEcrewperformance
Caution concerning forward-looking statements with respect to
CAE
This press release includes forward-looking statements about
the anticipated benefits of the acquisition by CAE of Sabre's
AirCentre airline operations portfolio (the Acquisition), CAE's
access to capital resources, and CAE's activities, events and
developments that CAE expects to or anticipates may occur in the
future including, for example, statements about CAE's vision,
strategies, market trends and outlook, future revenues, capital
spending, expansions and new initiatives, financial obligations and
expected sales. Forward-looking statements normally contain words
like "believe", "expect", "anticipate", "plan", "intend",
"continue", "estimate", "may", "will", "should", "strategy",
"future" and similar expressions. 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.
Important risks that could cause such differences include,
but are not limited to, the failure to gain access to expected
capital resources within anticipated timeframes or at all, risks
relating to the Acquisition, such as all or part of the intended
benefits therefrom not being realized or unanticipated
integration-related issues, costs or delays, risks relating to the
COVID-19 pandemic such as health and safety, reduction and
suspension of operations, global economic conditions, diversions of
management attention, heightened IT risks, liquidity risks and
credit risks, risks relating to the industry such as competition,
business development and awarding of new contracts, level and
timing of defence spending, government-funded defence and security
programs, constraints within the civil aviation industry,
regulatory matters, natural or other disasters, environmental laws
and regulations, climate change, risks relating to CAE such as
evolving standards and technology innovation, CAE's ability to
penetrate new markets, R&D activities, fixed-price and long
term supply contracts, strategic partnerships and long-term
contracts, procurement and original equipment manufacturer (OEM)
leverage, product integration and program management, protection of
CAE's intellectual property and brand, third-party intellectual
property, loss of key personnel, labour relations, liability risks
that may not be covered by indemnity or insurance, warranty or
other product-related claims, integration of acquired businesses
through mergers, acquisitions, joint ventures, strategic alliances
or divestitures, reputational risk, U.S. foreign ownership, control
or influence mitigation measures, length of sales cycle,
seasonality, continued returns to shareholders, information
technology and cybersecurity, CAE's reliance on technology and
third party providers, data privacy, and risks relating to the
market such as foreign exchange, availability of capital, credit
risk, pension plan funding, doing business in foreign countries,
geopolitical uncertainty, anti-corruption laws and taxation
matters. 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, 2021 and
the Management's Discussion & Analysis for the quarter ended
June 30, 2021. Any one or more of the
factors described above and elsewhere in this press release, and in
the documents referenced herein, may be exacerbated by the
continuing COVID-19 pandemic and may have a more negative impact on
CAE's business, results of operations and financial condition.
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.
Pending the Acquisition closing, Sabre's AirCentre airline
operations portfolio is a fully integrated business unit of Sabre,
and separate financial statements historically have not been
prepared for the Sabre AirCentre airline operations portfolio.
Consequently, the financial information of the Sabre AirCentre
airline operations portfolio included in this document has been
derived from the consolidated financial statements and historical
accounting records of Sabre and reflects certain significant
assumptions, judgments and allocations made by Sabre. The financial
position, net income and cash flows of the Sabre AirCentre airline
operations portfolio may not be representative of the financial
performance if the Sabre's AirCentre airline operations portfolio
had been a stand-alone entity or operated independently of Sabre.
As a result, the historical financial information or expected
future financial results of the Sabre AirCentre airline operations
portfolio may not be a reliable indicator of future
results.
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.
Material Assumptions
The forward-looking
statements set out in this press release are based on certain
assumptions including, without limitation: access to expected
capital resources within anticipated timeframes, the integration
and the realization of the anticipated benefits and synergies of
the Acquisition in the timeframe anticipated, the anticipated
negative impacts of the COVID-19 pandemic on CAE's businesses,
operating results, cash flows and/or financial condition, including
the intended effect of mitigation measures implemented as a result
of the COVID-19 pandemic, CAE's available liquidity from cash and
cash equivalents, undrawn amounts on CAE's revolving credit
facilities, the balance available under CAE's receivable purchase
program, CAE's cash flows from operations and continued access to
debt funding will be sufficient to meet financial requirements in
the foreseeable future; 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, 2021 and the Management's
Discussion & Analysis for the quarter ended June 30, 2021. Given the impact of the changing
circumstances surrounding the COVID-19 pandemic and the related
response from CAE, governments, regulatory authorities, businesses
and customers, there is inherently more uncertainty associated with
CAE's assumptions. 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.
Non-GAAP and other financial measures
This
press release includes non-GAAP and other financial measures.
Non-GAAP measures are useful supplemental information but do not
have a standardized meaning according to GAAP and therefore may not
be comparable to similar measures presented by other issuers. These
measures should not be confused with, or used as an alternative
for, performance measures calculated according to GAAP. They should
also not be used to compare with similar measures from other
companies. Management believes that providing certain non-GAAP
measures provides users with a better understanding of our results
and trends and provides additional information on our financial and
operating performance.
(1) EBITDA
EBITDA comprises
earnings before income taxes, finance expense – net, depreciation
and amortization.
(2) EPS
CAE calculates earnings
per share by taking the diluted earnings per share from continuing
operations attributable to equity holders of the CAE and dividing
that by the average number of diluted shares.
(3) Free cash flow
CAE calculates
free cash flow by taking the net cash generated by its continuing
operating activities, subtracting maintenance capital expenditures,
investment in other assets not related to growth and dividends paid
and adding proceeds from the disposal of property, plant and
equipment, dividends received from equity accounted investees and
proceeds, net of payments, from equity accounted investees.
Caution concerning forward-looking statements with respect
to Sabre
Certain statements in this press release are forward-looking
statements about trends, future events, uncertainties and Sabre's
plans and expectations of what may happen in the future. Any
statements that are not historical or current facts are
forward-looking statements. In many cases, you can identify
forward-looking statements by terms such as "expect," "future,"
"believe," "plan," "guidance," "outlook," "anticipate," "will,"
"forecast," "continue," "strategy," "estimate," "project," "may,"
"should," "would," "intend," "potential," or the negative of these
terms or other comparable terminology. Forward-looking statements
involve known and unknown risks, uncertainties and other factors
that may cause Sabre's actual results, performance or achievements
to be materially different from any future results, performances or
achievements expressed or implied by the forward-looking
statements. The potential risks and uncertainties include, among
others, the closing, integration and effects of the acquisition
described in this release, the financial performance of the
business to be acquired, the severity, extent and duration of the
global COVID-19 pandemic, including any variants, and its impact on
Sabre's business and results of operations, financial condition and
credit ratings, as well as on the travel industry and consumer
spending more broadly, the actions taken to contain the disease or
treat its impact, including travel restrictions, the effectiveness
and rate of vaccinations, the effect of remote working arrangements
on Sabre's operations and the speed and extent of the recovery
across the broader travel ecosystem, dependency on transaction
volumes in the global travel industry, particularly air travel
transaction volumes, including the impact of changes in these
transaction volumes from airlines' insolvency, suspension of
service or aircraft groundings, the effect of cost savings
initiatives, the timing, implementation and effects of the
technology investment and other strategic initiatives, the
completion and effects of travel platforms, travel suppliers' usage
of alternative distribution models, exposure to pricing pressure in
the Travel Solutions business, changes affecting travel supplier
customers, maintenance of the integrity of Sabre's systems and
infrastructure and the effect of any security breaches, failure to
adapt to technological advancements, competition in the travel
distribution market and solutions markets, implementation of
software solutions, reliance on third parties to provide
information technology services and the effects of these services,
the execution, implementation and effects of new, amended or
renewed agreements and strategic partnerships, including
anticipated savings, dependence on establishing, maintaining and
renewing contracts with customers and other counterparties and
collecting amounts due to Sabre under these agreements, dependence
on relationships with travel buyers, Sabre's collection,
processing, storage, use and transmission of personal data and
risks associated with PCI compliance, Sabre's ability to recruit,
train and retain employees, including Sabre's key executive
officers and technical employees, the financial and business
results and effects of acquisitions and divestitures, the effects
of any litigation and regulatory reviews and investigations,
adverse global and regional economic and political conditions,
including, but not limited to, economic conditions in countries or
regions with traditionally high levels of exports to China or that have commodities-based economies
and the effect of "Brexit", risks arising from global operations,
reliance on the value of Sabre's brands, failure to comply with
regulations, use of third-party distributor partners, the effects
of the implementation of new accounting standards and tax-related
matters. More information about potential risks and
uncertainties that could affect Sabre's business and results of
operations is included in the "Risk Factors" and "Forward-Looking
Statements" sections in Sabre's Quarterly Report on Form 10-Q filed
with the SEC on August 3, 2021, in
Sabre's Annual Report on Form 10-K filed with the SEC on
February 25, 2021 and in Sabre's
other filings with the SEC. Although Sabre believes that the
expectations reflected in the forward-looking statements are
reasonable, Sabre cannot guarantee future events, outlook,
guidance, results, actions, levels of activity, performance or
achievements. Readers are cautioned not to place undue reliance on
these forward-looking statements. Unless required by law, Sabre
undertakes no obligation to publicly update or revise any
forward-looking statements to reflect circumstances or events after
the date they are made.
Sabre Contacts:
Media
Kristin Hays, Senior Vice President,
Global Communications
kristin.hays@sabre.com
Heidi Castle, Senior Director,
Global Communications
heidi.castle@sabre.com
Investors
Kevin
Crissey, Vice President, Investor Relations
sabre.investorrelations@sabre.com
CAE Contacts:
General Media:
Hélène V. Gagnon, Senior Vice
President, Public Affairs, Global Communications and Corporate
Social Responsibility
+1-514-340-5536, helene.v.gagnon@cae.com
Trade Media:
Nathalie
Siphengphet, Director, Marketing & Strategy, Civil
Aviation Training Solutions
+1-514-341-2000 ext. 2204, nathalie.siphengphet@cae.com
Investor Relations:
Andrew
Arnovitz, Senior Vice President, Investor Relations and
Enterprise Risk Management
+1-514-734-5760, andrew.arnovitz@cae.com
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SOURCE CAE INC.