LMI Aerospace to acquire D3 Technologies for $65M

LMI Aerospace Inc. announced June 18 that it has agreed to acquire San Diego-based D3 Technologies Inc., a premier design and engineering services firm, for $65 million in cash. D3 generated revenues of $64 million for the year ended December 31, 2006, with earnings before interest, taxes and depreciation of more than $9 million. D3 has 350 employees, including 310 highly qualified engineers and technical resources. The transaction is expected to close during the third quarter, contingent upon, among other things, Hart-Scott-Rodino approval and the completion of the audit of D3's financial statements for 2004 and 2005. The acquisition is expected to be accretive to LMI's per share earnings in 2008.

Founded in 1982, D3 Technologies has offices in San Diego, Seattle, Dallas/Ft. Worth and Greenville, S.C. The company performs structure and sub-structure design work for manufacturers of commercial, business and military aircraft, for Boeing, Spirit AeroSystems, Vought Aircraft, Airbus North America, Lockheed Martin and others including key roles on the JSF for Lockheed and Boeing's 747-8, 777, and 787 programs. D3 Technologies' engineers have worked on a range of design and analysis projects including airframe, electro/mechanical and hydraulic/pneumatic systems and have expertise in mechanical, structural, and system design; stress and finite element analysis; tool design and engineering; numerical controlled programming; logistics and program support; and avionics software and hardware development.

"D3 is an established business with an experienced, proven team of engineers and managers that will enable LMI to forge an integrated engineering and manufacturing platform to better serve its customers," said Ronald Saks, president and chief executive officer of LMI Aerospace. "The combined capabilities of LMI and D3 will substantially improve the value proposition that we bring to our customers. Importantly, D3 brings with it additional participation in the fast growing 787 program and adds unique composite materials engineering expertise – both being stated strategic goals for LMI. The addition of D3, while adding significantly to our product offerings, also reduces our dependence on new aircraft production cycles."

LMI plans to fund the purchase of D3 with its existing cash and a new $80 million revolving credit agreement to be provided by Wachovia Securities. After funding the acquisition, LMI expects to have approximately $35 million available on the new line of credit.