LONDON \u2014\u00a0British aerospace and defense company Meggitt has dipped into the acquisition market for the second time in a matter of weeks with the purchase of the composite components arm of EDAC in the US.<\/p>\n\n\n\n
The $340 million purchase will see Meggitt gain capability in components for jet engine and airframe applications.<\/p>\n\n\n\n
Around 15 percent of the expected $104 million in\u00a02015 revenues are in defense;\u00a0the remainder is in civil aerospace composites. EDAC was formerly known as Parkway Aerospace and Defense.<\/p>\n\n\n\n
The business, acquired from the Greenbriar Equity Group and others, has plants in the US and Mexico;\u00a0the latter includes a joint venture with UTC Aerospace Systems.<\/p>\n\n\n\n
In August, Meggitt acquired the advanced composites business of British company Cobham in a deal worth $200 million.<\/p>\n\n\n\n
Military sales of the Cobham business account for around 85 percent of its $81 million in revenues \u2014 pretty much the reverse of the defense\/civil sales ratio in the latest deal with EDAC.<\/p>\n\n\n\n
Cobham has produced composite radomes, engine parts and other specialized components from plants in the UK and the US for customers including Lockheed Martin with the F-35.<\/p>\n\n\n\n
Meggitt said at the time of the Cobham purchase that it saw significant growth opportunity in commercial aerospace for the business.<\/p>\n\n\n\n
Philip Barker, partner and head of industrials at acquisition advisers Cavendish Corporate Finance, here, said the acquisition further confirmed a trend toward\u00a0companies strengthening their positions in the civil sector at the expense of defense.<\/p>\n\n\n\n
“Global demand for higher commercial aircraft production rates has bolstered the aerospace sector, and this acquisition reflects a persistent trend of supply chain consolidation with major industry players seeking to scale up capacity,” he said.\u00a0“Diversification into commercial aviation is further motivated by the long-term trend of reduced defense spending in Western countries, and has proved popular among other industry heavyweights.”<\/p>\n\n\n\n
Stephen Young, Meggitt’s CEO, said purchase of the EDAC business “decisively moves our composites strategy forward and positions us strongly in this key growth area.”<\/p>\n\n\n\n
Both the businesses will be folded into Meggitt’s polymers and composites division.<\/p>\n\n\n\n