Bombardier to acquire Global 7500 aircraft wing program from Triumph Group Inc.

• Bombardier enters into a definitive agreement to acquire Triumph’s Global 7500 wing manufacturing operations and assets
• Acquisition will secure the production ramp-up and long-term success of Bombardier’s Global 7500 program
• Bombardier will continue to operate the production line and integrate the employees currently supporting the program at Triumph’s Red Oak, Texas facility
• Transaction is expected to close in the first quarter of 2019 for a nominal cash consideration
• Acquisition will strengthen Bombardier’s position as a leading aerostructures manufacturer
• Transaction is not expected to impact Bombardier’s consolidated 2019 EBIT and free cash flow⁽¹⁾ guidance, and 2020 targets

Bombardier (TSX:BBD.B) today announced a definitive agreement to acquire the Global 7500 wing program from Triumph Group Inc. (NYSE: TGI). The acquisition will strengthen Bombardier’s position as a leading aerostructures manufacturer and secure the production ramp-up and long-term success of Bombardier’s flagship business jet.

The acquired operations will be incorporated into Bombardier’s Aerostructures and Engineering Services segment. 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 employees currently supporting the program.

“This acquisition is a perfect strategic fit for Bombardier Aerostructures,” said Danny Di Perna, President, Bombardier Aerostructures and Engineering Services. “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.”

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, which are 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 to $2.50 billion, reflecting additional intersegment revenues. The segment’s 2019 EBIT margin before special items⁽¹⁾ guidance is also adjusted to approximately 7.5%, reflecting marginal earnings from these additional sales during the program ramp-up. For 2020, the EBIT margin before special items objective of 9% to 11% remains unchanged.

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

The Global 7500 aircraft offers Bombardier’s signature smooth ride and a spaciousness that is unique among business jets. With its award-winning bespoke interior featuring a full-size kitchen and four true living spaces, the Global 7500 aircraft offers the ultimate in-flight experience. Setting the benchmark for the most exceptional cabin interior, the Global 7500 aircraft offers the most innovative features such as Bombardier’s patented Nuage seat, meticulously designed for maximum comfort and the revolutionary nice Touch cabin management system (CMS), a new way to connect with the Global 7500 aircraft cabin through the Bombardier Touch dial, featuring business aviation’s first application of an OLED display.

With over 69,500 employees across four business segments, Bombardier is a global leader in the transportation industry, creating innovative and game-changing planes and trains. Our products and services provide world-class transportation experiences that set new standards in passenger comfort, energy efficiency, reliability and safety.

Headquartered in Montreal, Canada, Bombardier has production and engineering sites in 28 countries across the segments of Transportation, Business Aircraft, Commercial Aircraft and Aerostructures and Engineering Services. Bombardier shares are traded on the Toronto Stock Exchange (BBD). In the fiscal year ended December 31, 2017, Bombardier posted revenues of $16.2 billion US. News and information are available at bombardier.com

1.     Non-GAAP financial measures. See Caution regarding non-GAAP measures at the end of this press release.

Bombardier and Global 7500 are trademarks of Bombardier or its subsidiaries.