Senior’s £21.1m US acquisition
Senior plc, a Herts-based manufacturer of hi-tech components and systems for OEMs, has acquired US aerospace manufacturing specialist, Sterling Machine Co, for £21.1m.Senior plc, a Herts-based manufacturer of hi-tech components and systems for OEMs, has acquired US aerospace manufacturing specialist, Sterling Machine Co, for £21.1m.
The deal is Senior’s first acquisition in six years and falls in line with its strategic objective to focus on the aerospace and automotive OEM markets and is expected to be immediately earnings enhancing.
Sterling’s expertise lies in producing precision metallic parts for the aerospace industry using state-of-the-art production and process control systems to machine steel, aluminium, magnesium and titanium parts from bar stock, forgings and castings.
Graham Menzies, Senior’s chief executive, said: “Sterling is a profitable aerospace business with a strong market position, excellent management and good growth prospects.
“The acquisition, together with the continuing growth of the general aerospace industry, the group’s growing automotive prospects, particularly in diesel applications from 2007 onwards, and the recovering profitability of the industrial division leave the group well placed for the future.”
Sterling is a family business based in Enfield, Connect-icut. For the year to 31 December 2005, it recorded sales of £10.6m and pre-tax profit of £2.4m.
It was founded in Enfield, Connecticut, in 1956 and has been owned by brothers Greg and Tom Caravella since 1994. Caravella will be staying on with the company for up to six months post acquisition to assist with the transition to Senior.
In 2003, due to continued expansion, the business relocated to a new purpose built factory investing at the same time in a number of new modern machines. The property, owned by the Caravella brothers through a separate legal entity, was purchased by Senior as part of the transaction.
Sterling is regarded as a pre-eminent manufacturer of transmission and rotor-head helicopter components for military platforms, principally for its largest customer, the Sikorsky Aircraft Corporation.
The addition of Sikorsky as a major new customer was one of the principal reasons for the purchase, along with entry into a growing military helicopter market and the purchase of a modern facility with expansion opportunity.
Sikorsky has forecasted healthy increases in helicopter build rates over the next five years, predominantly for military applications, with the demand increasing as a result of both major modification and new start programmes.
Senior has operations in 11 countries operating under three divisions: Aerospace, automotive and industrial.