- Product Support
- Product Enhancements
General Dynamics to Buy Galaxy Aerospace
Executive Jet Inc. places $2 billion order for Galaxy business jets for its NetJets® fractional aircraft ownership program
FALLS CHURCH, Va., May 1, 2001-- General Dynamics (NYSE: GD) announced today that it has reached an agreement to acquire Galaxy Aerospace Company, LP, for $330 million in cash. In addition, the selling parties may receive additional payments - up to a maximum of $315 million -- through 2006 contingent upon the achievement of specific revenue targets. Galaxy Aerospace is a joint venture, formed in 1997, of the Hyatt Corporation and Israel Aircraft Industries Ltd.; it anticipates 2002 revenues of $635 million and operating income of $72 million. Galaxy is headquartered at Alliance Airport in Fort Worth, Texas; it has approximately 450 employees. When the transaction closes, Galaxy will become part of General Dynamics' Aerospace group, which includes Gulfstream Aerospace. The companies expect to close the deal next month.
In the transaction, General Dynamics will acquire two new product lines for its Aerospace group: the Astra mid-size twin turbofan business jet, and the Galaxy, the first aircraft in the super mid-size class, which entered service in January 2000, well ahead of its competitors. The Galaxy has the longest range and largest cabin volume in the super mid-size aircraft category. General Dynamics will continue Galaxy Aerospace's relationship with Israel Aircraft Industries. In this arrangement, both aircraft models will be assembled by Israel Aircraft Industries in Tel Aviv, Israel, and flown to Fort Worth in a "green" configuration; General Dynamics will design and install custom interiors and all optional equipment.
Concurrent with the transaction, Executive Jet Inc., a Berkshire Hathaway company, has placed an order for 50 of the super mid-size Galaxy aircraft to be delivered over the next five years, with options for 50 more for its NetJetsâ fractional aircraft ownership program. Total value of the order, options and maintenance services is approximately $2 billion.
At the end of the first quarter of 2001, total backlog for General Dynamics Aerospace Group was $4.7 billion.
"This acquisition gives General Dynamics immediate presence in the super mid-size and mid-size market - the fastest growing segment of the business aircraft market," said Nicholas D. Chabraja, General Dynamics chairman and CEO. "The Galaxy and Astra SPX aircraft are superb products, complementing Gulfstream's GIV-SP, GV, and the new GV-SP. With a larger family of aircraft, we will attract and retain a broader range of customers, providing them with entry, move-up, and add-on opportunities. It greatly expands our competitive position -- without the expense and time of product development -- and improves our already strong position in the fractional ownership market as a result of our strong relationship with Executive Jet and its NetJetsâ fractional aircraft ownership program.
"In addition," Chabraja noted, "the acquisition also increases our revenue base for service, parts and refurbishment since Galaxy supports a worldwide fleet of more than 400 business jets, including previous Israel Aircraft Industries-built business jets such as the Westwind series."
Chabraja will meet with financial analysts and investors to discuss the acquisition on Tuesday, May 1, at 9:00 a.m. at the New York Palace Hotel, 455 Madison Avenue, New York, NY. The conference will be simulcast on the World Wide Web at www.generaldynamics.com; a rebroadcast of the conference will be on the website by 1:00 p.m. A replay of the conference will also be available at 1:00 p.m. by calling 877-519-4471 (domestic) or 973-341-3080 (international); the passcode is 2572997.
NOTE TO EDITOR
General Dynamics, headquartered in Falls Church, Virginia, employs approximately 46,000 people worldwide and anticipates 2001 sales of approximately $11.5 billion. The company has leading market positions in business aviation, information systems, shipbuilding and marine systems, and land and amphibious combat systems. More information about the company can be found on the World Wide Web at www.generaldynamics.com.
Gulfstream Aerospace Corporation, a wholly-owned subsidiary of General Dynamics (NYSE: GD), designs, develops, manufactures, markets, services and supports the world's most technologically-advanced business jet aircraft.