Hexcel (NYSE:HXL) shares are trading higher after the company announced a merger of equals with Woodward, Inc. (NASDAQ:WWD). The aerospace suppliers say they're are coming together to help combat rising pressures of climate change.
The combined company is expecting to generate net revenues of approximately $5.3 billion and EBITDA of $1.1 billion, or a 21% EBITDA margin.
Hexcel shareholders will receive a fixed exchange ratio of 0.625 shares of Woodward common stock for each share of Hexcel common stock. Woodward shareholders will continue to own the same number of shares of common stock in the combined company as they do immediately prior to the closing. Woodward is also increasing its quarterly cash dividend to 28 cents a share.
Nick Stanage, CEO of Hexcel, will serve as CEO of the combined company. Tom Gendron, CEO of Woodward, will serve as executive chairman of the combined company until the first anniversary of the closing of the merger, at which time Gendron intends to retire from the company and will then serve as non-executive chairman.
"Both Woodward and Hexcel have attractive growth trajectories, with strong aftermarket positions and increased composite penetration driving our respective outlooks,” Gendron said in a statement.
Hexcel shares were trading up 8% to $78.75 on Monday. The stock has a 52-week high of $87 and a 52-week low of $59.66.