UNC Inc., an Annapolis-based aviation services company, announced yesterday that it is being acquired by Greenwich Air Services of Miami in a deal valued at $700 million.
The merger, which combines UNC's expertise in business aviation services with Greenwich's strength in servicing commercial airliners, will create a company with 10,000 employees worldwide and $1.8 billion in annual revenues.
In Maryland, the deal is expected to result in the loss of the UNC headquarters, which employs 70 and generates $20 million annually in payroll and taxes. UNC is the only Fortune 500 company based in Anne Arundel County. None of UNC's 6,900 lTC other workers are employed in Maryland.
Dan A. Colussy, chief executive officer of UNC, said he met with staff members yesterday morning and informed them that the operation ultimately is likely to move to Miami.
"It won't happen quickly, but the trend would be to consolidate toward the Miami operation," he said.
Colussy, an avid sailor who moved the company's headquarters from Northern Virginia to Annapolis in 1985, said he will stay with the company until it is fully integrated with Greenwich and that he plans to remain active "in the acquisition field."
Colussy, 65, is also chairman of the board of Blue Cross and Blue Shield of Maryland and serves on several other boards in the Baltimore area.
The merger is to be effective in the spring, subject to approval by stockholders and federal regulators.
"There's only a tiny amount of overlap [in the businesses] so we shouldn't have any antitrust issues," Colussy said.
The deal is not likely to encounter any objections from UNC's stockholders, who have watched the company's stock languish for years. Under terms of the agreement, UNC shareholders are to receive at least $14 worth of Greenwich nonvoting common stock for each share of UNC. The agreement provides that if Greenwich's shares rise above $24.86, UNC stockholders will receive up to $16.10 for each UNC share held.
UNC's stock, which traded as low as $6 a share early last year, closed at $10.875 Thursday before the acquisition
was announced. Yesterday, the stock rose $2.50, to $13.375. Greenwich's nonvoting shares closed at $22.25, up $1.
The total merger consideration includes at least $320 million in cash and stock and another $370 million in UNC debt. UNC stockholders also have the option of receiving cash instead of stock, up to a maximum of 50 percent of the total merger consideration.
The merger culminates a strange evolution over the past 10 years for UNC. The one-time uranium company, known until 1984 as United Nuclear Corp., was forced to reshape itself when the need for uranium dwindled with the demise of the nuclear energy industry.
UNC subsequently grew into a leading aviation services company with four major divisions. Informal merger talks between Greenwich and UNC began about four months ago, with Greenwich making an offer last week, Colussy said.
"They put a proposition on the table, and were able to back it up financially, that was extremely attractive to our shareholders," he said.
The merger caps a year in which both companies have made substantial acquisitions. In May, UNC purchased Garrett Aviation Services, nearly doubling its annual revenues to $1 billion a year while creating a work force of 7,000 with operations in 25 states.
The acquisition of Garrett boosted UNC's share of the growing business-aviation services market from 22 percent to 52 percent, promising far more opportunities to overhaul and repair corporate jets.
"We've been on an acquisition strategy," Colussy said. "But, in an industry consolidating like ours, you consolidate others and perhaps get consolidated."
In June, Greenwich completed a $230 million cash acquisition of portions of Aviall Inc., giving it 3,300 employees worldwide and $750 million in annual revenues.
While Greenwich has several divisions in aviation services, it specializes in the highly competitive business of maintaining and overhauling commercial airline engines. The practice, known as outsourcing, came under intense scrutiny following the crash of ValuJet Flight 592 in the Florida Everglades.
Long a leader in the field, Greenwich fared well, maintaining contracts with leading airlines such as Southwest, Continental, UPS and Federal Express.
Pub Date: 2/15/97