Smiths Group continues to take advantage of the weak US dollar by taking over Florida-based Smiths exploits weak dollar to take on Trak, its fifth acquisition in five weeks, for $112 million.
Although Trak made only $71 million in sales last year, Smiths chief executive Keith Butler-Wheelhouse described the takeover as part of "our intent to acquire high growth companies". Trak manufactures microwave electronic components and antennas, and will join Smiths Speciality Engineering as part of the Interconnect business group, which produces cables and connectors for radio frequency systems.
Smiths has highlighted the potential for Interconnect to continue to grow on the back of rising defence spending in the USA, where its products are already present in the Lockheed Martin F-16 and Joint Strike Fighter. More than half of Trak's revenues come from government sales, mostly from the US defence budget, the company says.
The purchase means that Smiths has now spent $331 million in cash on takeovers since releasing its interim results on 10 March. At the end of January, the company reported it had paid off much of its debt by selling off its polymer seals business, but it still had net debts of £206 million ($363 million).
The weak dollar makes acquisitions in the USA attractive to European companies - not only are they relatively cheap, they also have lower running costs than companies operating in euros or sterling (Flight International, 30 March-5 April).
Smiths Aerospace has opened the first phase of its aerospace components factory in Suzhou, close to Shanghai, which will produce civil aero engine components for GE Aircraft Engines.
Source: Flight International