International engineering group Meggitt signed a deal to acquire Cobham’s advanced composites unit for $200 million in cash.
Cobham’s advanced composites unit produces components that are engineered for use on composite engines, radomes, and structures serving the commercial aerospace and defense markets. They have over 30 years of advanced composite products experience, best-in-class design, and many process engineering capabilities that provide turn-key solutions to commercial aerospace and defense markets. Not only this, but this business employs over 480 workers and operates in four facilities distributed across the United States and United Kingdom.
Last year, Cobham’s advanced composites unit generated over USD$81 million in revenue. By acquiring the unit, Meggitt will expand its complex composites business. This whole process group will be a part of the Meggitt Polymers & Composites (MPC) Division.
Although military sales account for 85 percent of Cobham’s revenue, growth is increasing fast on the civil side as the Airbus Group and Boeing Company crank up airliner output. An example of Cobham’s civilian expertise is providing Wi-Fi compatible radar domes to existing jet fleets.
Meggitt CEO Stephen Young stated,
“The smaller, more intricate composites-that end of the market-is very fragmented. It’s a good growth market and absolutely I think there is room for consolidation.”
Ideally, acquiring the advanced composites unit will have an up-front cost of $4.3 million USD and produce a run-rate cost of roughly $3.8 million USD from 2017.
“The acquisition represents a major step in strengthening our composites capability,” Young said. The advanced composites businesses of Cobham 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.”
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