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HR Textron up for $365M sale

Posted: March 2, 2009 8:09 p.m.
Updated: March 3, 2009 4:59 a.m.
 
Woodward Governor Co. has reached an agreement to acquire Santa Clarita-based HR Textron, which employs about 900 workers.

"One of the reasons Woodward looked to HR Textron was for its highly talented staff and workforce, and we feel very comfortable we found a good partner in this deal," Textron spokeswoman Karen Gordon Quintal said Monday.

Gordon Quintal could not comment on how the acquisition might affect Textron's local headquarters.

Woodward Business Communications Manager Rose Briani-Burden said it is too premature to say how the agreement will impact HR Textron's employees and headquarters.

Under the purchase agreement, Woodward would acquire all of the outstanding capital stock of HR Textron from Textron Inc., and the UK assets used in HR Textron's business, according to Woodward's Friday news release.
Colorado-based Woodward Governor Co., which makes energy control systems for aircraft, cut its 2009 earnings and sales guidance on Friday, citing the recession's effects on sales.

Still, the company also said it would buy HR Textron, part of diversified manufacturer Textron Inc., for about $365 million in cash.

Woodward expects the deal to boost its growth in motion control applications in the aerospace and defense markets.

The company expects 2009 profit between $1.40 and $1.65 per share, excluding charges, on revenue of $1.3 billion to $1.4 billion.

Previously, it forecast a profit of $1.65 to $1.90 per share on revenue between $1.4 billion to $1.5 billion.

Analysts surveyed by Thomson Reuters forecast earnings of $1.75 per share on sales of $1.46 billion.

HR Textron makes systems for weapons, aircraft, turbine engines and combat vehicles.

The company had sales of about $260 million in 2008, Woodward said. The buyout will not impact earnings per share in 2009, while adding to earnings per share in 2010.

Meanwhile, Textron said the sale of the unit will add about $265 million in after-tax cash proceeds. It is expected to shave about 5 cents per share from Textron's earnings in 2009.

Last month, Textron forecast 2009 earnings of $1 to $1.50 per share, while analysts' anticipate a profit of $1.15 per share.

Shares of Woodward Governor rose 12 cents to close at $17.22, while shares of Textron lost 15 cents, or 2.6 percent, to finish at $5.65.

HR Textron is headquartered in Santa Clarita which offices in Pacoima and Poole, England.

Woodward anticipates the acquisition to be completed in April 2009, according to the Woodward news release.

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