Meggitt Lands EDAC Unit In $340M Deal With Greenbriar
U.K. engineering group Meggitt PLC on Tuesday said that it has agreed to buy the composites division of EDAC Technologies Corp. from Greenbriar Equity Group for $340 million in cash, again growing its aerospace component capabilities.
The unit, which EDAC acquired as Parkway Aerospace & Defense in 2013, manufactures precision engineered components for jet engine and airframe applications. Meggitt said that it plans to finance the deal using existing credit facilities.
The company acquired the composites business of Cobham PLC in August for $200 million. CEO Stephen Young said that the businesses, which will both be integrated into the Meggitt Polymers & Composites division, are in line with the company’s strategy for growth.
“This business is a rare, scale player in civil engine and other composite parts. Like the complementary acquisition of the advanced composites businesses of Cobham PLC for which the completion process is well underway, this decisively moves our composites strategy forward, and positions us strongly in this key growth area,” Young said in a statement.
The EDAC unit includes wholly owned sites in Cincinnati; Erlanger, Kentucky; and Saltillo, Mexico. It also has a joint venture with UTC Aerospace Systems in Saltillo that focuses on the manufacture of secondary aerospace components.
The business’s key customers include General Electric, Snecma SA and United Technologies Corp. Meggitt expects the unit to rake in $104 million in revenue this year, according to the statement.
The company also said that both of its recent composite component acquisitions will improve its manufacturing capabilities and processes, and will help meet customer demand.
“Our product portfolio will be significantly enhanced by these composites acquisitions, and we will benefit from decades of expertise in the complex processes required to manufacture high-integrity composite components in volume,” Young said. “These capabilities will enable us to better address the increasing demand for composites, particularly around the engine and ancillary systems.”
Rye, New York-based Greenbriar has raised $2.5 billion across three funds since its inception in 1999, the company said. It focuses on investments in the transportation industry, particularly on manufacturers and service providers.
Greenbriar purchased EDAC in 2013 through its affiliate GB Aero Engine LLC, paying about $104.1 million and beating out a competing bid from MidOcean Partners and Canada's Public Sector Pension Investment Board.
EDAC bought the aerospace and defense business of Parkway Products a few months later for an undisclosed amount.
Meggitt’s purchase of the EDAC unit still requires regulatory approval, including from the Committee on Foreign Investment in the U.S. and antitrust officials. It expects to complete the transaction by the end of the year.
Kirkland & Ellis LLP is advising Greenbriar on the deal, with a team led by Shawn O’Hargan.
Hogan Lovells LLP is advising Meggitt, with a team led by Barry Dastin and including Glenn Smith and Justin Johnson.
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