KLX Aerospace | KLX Inc. Acquires Herndon Aerospace

KLX Inc. Acquires Herndon Aerospace

17 May 2016

KLX Inc. Acquires Herndon Aerospace

KLX Inc. ("KLX") (NASDAQ: KLXI), the world's leading distributor and value added service provider of aerospace fasteners and consumables, and a provider of services and products for the oil and gas industry, today announced that it has acquired Herndon Aerospace & Defense, LLC ("Herndon"), a leading supply chain management and consumables hardware distributor serving principally military depot aftermarket customers, as well as commercial aerospace aftermarket customers.

Amin Khoury, Chairman and Chief Executive Officer of KLX stated, "The acquisition of Herndon expands our capability to provide comprehensive aftermarket supply chain management solutions to a broader portfolio of aftermarket customers. Herndon's revenues and EBITDA for the year ended December 31, 2015, adjusted to exclude non-recurring costs under the prior ownership, were $132.5 million and $20.3 million, respectively. We expect the integration of the Herndon business into the existing KLX aerospace distribution platform to yield substantial synergies."

Mr. Khoury concluded, "The acquisition price of approximately $210 million in cash, plus a standard working capital adjustment, represents a multiple of approximately 10.5 times Herndon's fiscal year ended December 31, 2015 adjusted EBITDA. Pro forma for the expected synergies, the purchase price multiple is expected to be approximately 7 times adjusted EBITDA. The acquisition is expected to be accretive to our second half of 2016 financial results and substantially accretive to earnings in 2017, as we begin to realize the very significant cost synergies. We expect acquisition, integration and transition costs associated with the transaction, aggregating to approximately $10 million through the end of 2017. We are excited to welcome the Herndon team to KLX, and believe they will be a great addition to our market leading ASG business."

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