US aircraft seating specialist Simula is to sell its airline seats unit Airline Interiors to French-owned rival Weber Aircraft as part of a recapitalisation programme unveiled today.
Phoenix-headquartered Simula says Gainesville, Texas-based Weber, owned by Groupe Zodiac of France, is paying $14.5 million in cash and taking on some $7.5 million in liabilities, $2.5 million of which is due to other Simula companies.
Poway, California-based Airline Interiors is a leading player in refurbishment of aircraft cabins and has its AI-1000 and AI-2000 16-g capable seats as its key products alongside a pioneering passenger airbag system for airliners. It was bought by Simula in August 1993.
In addition to the sale of Airline Interiors, Simula has secured a new $22 million credit facility from CIT Group to replace its existing line of credit, and a $20 million capital injection through the placing of secured senior notes with venture capitalist Levine Leichtman Capital Partners II.
The company’s Arthur Levine says in a statement: “We believe Simula is a leader in its industry and has a strong and experienced management team.”
Simula has extensive interests in protective and energy absorption technologies in the military, notably helicopter, and automotive sectors.
The financial packages, which give the company vital breathing space, were secured by its investment banker Jefferies & Company which was hired to assist Simula “in implementing an ongoing programme to strengthen the company’s balance sheet and refocus its business”. CIBC World Markets conducted the Airline Interiors transaction.
In a November filing with the US Securities and Exchange Commission (SEC), Simula warned: “The Company’s liquidity and ability to fund working capital and debt service requirements during the next year will be dependent upon improved cash flow from operating units and obtaining replacement financing of its bank line of credit under a senior credit agreement, and replacement financing of $4.3 million in its 10% senior subordinated notes (the “10% notes”). The 10% notes were originally due September 15, 1999 and have been extended until December 31, 1999.”
Zodiac already owns Sicma Aero Seat in France which already has an extensive line of seating including a 16g-capable model. In November last year it additionally acquired diverse aircraft systems manufacturer Intertechnique of France.
Simula says it hopes to close the deal this month but notes that it is subject to US anti-trust review. It was not immediately clear whether European approval would also be required.
Reprinted with the permission of Air Transport Intelligence. January 4, 2000.