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HEICO Acquires Wencor Group in a $2.05 Billion Deal

HEICO Corporation (NYSE: HEI), a renowned aerospace supplier, announced Monday its intention to acquire Wencor Group. The move, valued at $2.05 billion, aims to expand HEICO's portfolio of generic parts.

Wencor Group building
Wencor Group building

HEICO Shares Reach Record High Following Acquisition Announcement

Following the news of the Wencor acquisition, HEICO's shares reached an unprecedented high. An approximate 6% surge was noted, with shares trading at $176.41 in the early trading period.

Deal Structure: Cash and Stock Combination

The acquisition will see HEICO purchasing Wencor from its affiliates, Warburg Pincus LLC, and Wencor's management. The transaction is structured with $1.9 billion in cash and $150 million in HEICO Class A common stock.

HEICO's Largest Acquisition Amidst Aerospace Industry Challenges

This deal represents the largest acquisition in HEICO's history. The move is crucial when North American airlines and aircraft repair facilities increasingly depend on used and generic parts. This trend is due to the rising costs and persistent supply chain disruptions impacting the aerospace industry.

Wencor Acquisition to Expand HEICO's Aftermarket Offerings

HEICO's CEO, Laurans Mendelson, noted that acquiring Wencor significantly expands HEICO's aftermarket product range. The deal is projected to be finalized by the end of the 2023 calendar year.

Wencor's Contribution to the Aerospace Industry

Wencor is known for its parts and repairs integral to various aircraft systems. These include hydraulic, pneumatic, electronic, and electro-mechanical cockpit and galley systems across various aircraft models.