Meggitt acquires advanced composites businesses of Cobham
Meggitt PLC (“Meggitt” or “the Group”), a leading international engineering group specialising in aerospace, defence and energy markets, has agreed to acquire the advanced composites businesses (the “Businesses”) of Cobham plc for US$200 million in cash (the “Acquisition”), financed from existing resources.
The Businesses are global leaders in the design, development and production of highly engineered aerospace composite engine components (spinners, internal multi-stage components, exhaust flaps), radomes (C4I and defensive measures radomes, with a growing position in civil radomes) and complex secondary structures (air-to-air refuelling, structural munitions components). The Businesses will be integrated into Meggitt Polymers & Composites (MPC), a division of Meggitt PLC.
The Businesses operating facilities are located in the United States (San Diego, California and Baltimore, Maryland) and in the UK (Shepshed, Leicestershire and Stevenage, Hertfordshire).
The Businesses revenues in 2014 were US$81.1m. The purchase price implies a multiple of 10x 2016e EBITDA.
Rationale and highlights of the transaction
The Businesses fit well into Meggitt’s business model, with strong technologies and a significant level of single-source content. The Acquisition also represents an excellent strategic and complementary fit with existing Group capabilities:
Financial effects of the transaction
Stephen Young, Group Chief Executive of Meggitt, commented:
“The Acquisition represents a major step in strengthening our composites capability. The advanced composites businesses of Cobham plc are highly complementary to Meggitt’s business model, with strong technology positions, a significant level of sole-source content and substantial growth opportunities in commercial aerospace.
“The Acquisition will enhance our materials and manufacturing technologies and product offerings in complex composites, which are key to next generation aircraft components.
“We look forward to welcoming the employees of the advanced composites businesses into our organisation.”
The Acquisition, which is conditional on regulatory clearances including CFIUS and anti-trust, and other customary conditions, is expected to complete in the fourth quarter of 2015.
There will be a call for analysts and investors at 9am today. The dial-in details are as follows:
Dial-in: +44 (0)20 3478 5921
Pass code: Meggitt
There will be a replay facility (available for 7 days), the details for which are:
Dial-in: +44 (0)121 260 4861
Pass code: 1514740#
For further information, please contact:
Doug Webb, Chief Financial Officer
Richard Cashin, Group Head of Investor Relations – Tel: 01202 597597
Richard Oldworth – Tel: 0207 466 5000
About the advanced composites businesses of Cobham plc
The advanced composites businesses of Cobham plc comprise of Cobham Advanced Composites Limited, Compass Composite Products Inc and certain assets of Cobham Advanced Electronic Solutions Inc. The businesses are global leaders in the design, development and production of highly engineered aerospace composite engine components, radomes and structures. With over 30 years of advanced composite products experience, the company has developed best-in-class advanced design, process engineering and manufacturing capabilities and provides turn-key solutions to commercial aerospace and defence markets. The businesses employ 487 employees and operate four facilities across the US and the UK.
The businesses have developed significant intellectual property and deep manufacturing know-how over decades and, through substantial investment, strong, established market positions.
Meggitt PLC is a leading international engineering group specialising in aerospace, defence and energy markets with a consistent record of strong financial performance. Meggitt’s goal is to increase and strengthen its presence in long term growth markets through proprietary product development reinforced by strategic acquisitions and investment in people and facilities. Meggitt’s well-balanced portfolio offsets variation in demand from the market niches within which it operates.