ST Engineering leverages capabilities through EcoServices investment
EcoServices' expertise in engine wash services will boost ST Engineering's aerospace sector’s global maintenance, repair and overhaul network.
In a release, Singapore Technologies Engineering Ltd announced that further to an earlier announcement on 22 December 2011 regarding the investment of a 50.1% equity interest in EcoServices, LLC for a purchase consideration of US$33.3m, Vision Technologies Aerospace Incorporated has entered into an agreement with Pratt & Whitney to restructure the original terms of the investment and has also completed the investment under those new terms.
The restructuring is designed to achieve greater efficiency in the business as it expands internationally.
Under the restructured terms of the investment, VT Aerospace has invested a 50.1% equity interest in EcoServices for a purchase consideration of US$20m. Immediately prior to the closing of the investment, Pratt & Whitney contributed all of the assets of the EcoServices business to EcoServices other than the business’ intellectual property. At the closing, EcoServices entered into an exclusive, perpetual, irrevocable and worldwide license and purchase option agreement with Pratt & Whitney for the use and acquisition of that intellectual property.
The purchase option can be exercised anytime after an initial 90-day period following today’s closing. The license and purchase option agreement may be assigned by EcoServices to another company jointly held by VT Aerospace and Pratt & Whitney, or their respective affiliates. The current aggregate cost of the license and purchase option is US$13.3m. The restructured terms of the investment preserve the economics of the original investment described in the 22 December 2011 announcement. The investment was completed following the receipt of regulatory approvals and fulfilment of other closing conditions.
With a current staff of approximately 50 specialists, EcoServices is the largest provider of advanced technology engine wash services to both commercial and military aircraft operators. EcoServices will be managed as part of ST Engineering’s aerospace arm, leveraging its aerospace sector’s global maintenance, repair and overhaul network, track record and expertise in aircraft MRO and engineering. At the same time, EcoServices will benefit from Pratt & Whitney’s extensive experience in advanced engine technologies.
The investment is not expected to have any material impact on the consolidated net tangible assets per share and earnings per share of ST Engineering for the current financial year.