Senior plc (LSE:SNR) signed a definitive agreement to acquire substantially all of the assets of Spencer Aerospace Manufacturing, LLC for approximately $100 million on June 9, 2022. Senior will pay $60 million for Spencer Aerospace, comprising an initial consideration of $30 million in cash at completion and a further $30 million 12 months after completion. An additional $40 million is potentially payable in milestone amounts, dependent on the financial performance of Spencer Aerospace, during the period between completion of the acquisition and 31 December 2026.

The final earnout milestone would become payable upon Spencer Aerospace's annual revenue reaching $40 million, representing revenue growth to more than 300% of expected 2022 revenue. The transaction will be funded using the Group's existing borrowing facilities. Spencer had Revenue of $5.9 million, gross assets of $12 million and EBITDA loss $1.9 million as of December 31, 2021.

The current management team will remain with the Company following acquisition. The acquisition is subject to customary closing conditions. The acquisition is expected to complete in Q3 2022.

The transaction is expected to be accretive to adjusted earnings per share in the first full year of ownership. As of September 16, 2022, final regulatory approval is likely to be received around the end of 2022, at which point Senior and Spencer Aerospace expect the acquisition to complete.