Thales in Negotiations to Sell Ground Transportation Systems Unit to Hitachi Rail
August 04 2021 - 1:50AM
Dow Jones News
By Olivia Bugault
Thales SA said Wednesday that it has entered into exclusive
negotiations with Japanese conglomerate Hitachi Ltd.'s subsidiary
Hitachi Rail for the sale of its ground transportation systems
business for an enterprise value of 1.66 billion euros ($1.97
billion).
The transaction, which would be completed by the end of 2022 or
the beginning of 2023 and will be paid in cash, will strengthen
Thales's balance sheet and its focus on three main markets:
aerospace, defense, and digital identity and security, it said.
After the sale, the French aerospace-and-defense company now
targets an earnings before interest and taxes margin of 12% in the
medium-term.
Thales also updated its 2021 outlook as its transport segment
will be considered as discontinued operations. The company said it
now expects 2021 sales to come between EUR15.8 billion and EUR16.3
billion compared with a previous range of between EUR17.5 billion
and EUR18 billion, while it now targets an EBIT margin of 9.8% to
10.3%. That compares to a previous forecast of 9.5% to 10%.
Thales's and Hitachi's boards of directors approved the deal and
"the final purchase price will be determined after customary
adjustments for net working capital and net debt based on actual
amounts at the closing date," Thales said.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
August 04, 2021 01:50 ET (05:50 GMT)
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