(RTTNews) – Woodward Inc. (WWD) and Hexcel Corp. (HXL) agreed to combine in an all-stock merger of equals. The combined company will be named Woodward Hexcel.
As per the terms of the agreement, Hexcel shareholders will receive a fixed exchange ratio of 0.625 shares of Woodward common stock for each share of Hexcel common stock, and 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.
Upon completion of the merger, existing Woodward shareholders will own about 55% and existing Hexcel shareholders will own approximately 45% of the combined company on a fully diluted basis. In connection with the transaction, Woodward is increasing its quarterly cash dividend to $0.28 a share.
The companies expect the merger to close in the third calendar quarter of 2020.
The combined company will have more than 16,000 employees, manufacturing operations in 14 countries on five continents, and a diversified customer base across multiple market. Woodward Hexcel will be headquartered in Fort Collins, Colorado.
Nick Stanage, Chairman, Chief Executive Officer and President of Hexcel, will serve as Chief Executive Officer of the combined company. Tom Gendron, Chairman, Chief Executive Officer and President 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 of the combined company until the second anniversary of the merger close.
At that point, Stanage will assume the role of Chairman of the Board in addition to his CEO responsibilities. The combined company’s Board of Directors will have 10 members, consisting of five directors from each company, including Gendron and Stanage.