Precision Castparts to buy Héroux-Devtek's aerostructures unit

Washington DC
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Precision Castparts has agreed to acquire "substantially all" of the aerostructures division of Héroux-Devtek in a Canadian dollars C$300 million ($296 million) cash deal.

The move rids the Montreal-based Héroux-Devtek of a non-core business that struggled to produce profits last year, allowing the firm to concentrate on expanding market share in its landing gear business.

Meanwhile, the Portland, Oregon-based Precision Castparts will add a C$130 million business, measured in terms of annual sales, to its Fastener Products segment, boosting the supplier's strategy to increase its level of integrated services in the aerospace supply chain.

Both companies expect the acquisition to close during the second quarter of Precision Castparts' Fiscal 2013, which ends in September. Precision Castparts also expects the deal to add to its bottom line immediately.

Mark Donegan, Precision Castparts' chief executive, says the acquisition adds capabilities to machine longer aircraft ribs and spars and to forge large components such as titanium bulkheads, which is a key feature of the Lockheed Martin F-35.

The acquired businesses includes aerostructures factories in Arlington, Texas, Cincinnati, Ohio, Dorval, Canada and Querotero Mexico.

"These businesses provide us with the advanced, state-of-the-art machining capability that will continue to help drive our top- and bottom-line growth," Donegan says.

Meanwhile, Héroux-Devtek expects to lodge a profit on the sale of C$230 million, and is currently evaluating various alternatives that include a "significant distribution" to shareholders.