The biggest defence company takeovers in 2015
Three of the ten biggest deals in 2015 exceeded a billion US dollars, including Lockheed Martin’s $9bn acquisition of Sikorsky Aircraft from UTC, the year’s biggest deal. Army-technology.com lists the ten biggest defence company takeovers completed in 2015 based on deal value.
Lockheed Martin / Sikorsky Aircraft - $9bn
American aerospace and defence company Lockheed Martin acquired military and commercial aircraft manufacturer Sikorsky Aircraft from United Technologies Corporation (UTC) for $9bn in November. Sikorsky Aircraft has been integrated into Lockheed Martin's Mission Systems & Training (MST) business unit following the acquisition.
UTC had announced its intention to sell its helicopter business in June this year and reached an agreement with Lockheed Martin in July. The takeover allows Lockheed Martin to expand its core business into the production and sustainment of helicopters.
Harris / Exelis - $4.75bn
Harris Corporation, an international communications and information technology services provider, took over Exelis, a global aerospace, defence, information and services firm, for $4.75bn in May under a definitive agreement that was signed in February.
The cash-and-stock deal provided Exelis shareholders with $16.625 in cash and a 0.1025 share of Harris common stock. Harris shareholders will hold 85% ownership in the combined company, while Exelis shareholders own a 15% stake. The addition of Exelis will help Harris to provide its customers with innovative and cost-effective solutions.
Alcoa / RTI International - $1.5bn
RTI International Metals was purchased by Alcoa, a lightweight metals technology company based in the US, for $1.5bn in July under an agreement executed in March. The new business unit, known as Alcoa Titanium & Engineered Products (ATEP), is integrated into Alcoa's downstream Engineered Products and Solutions (EPS) division.
ATEP provides titanium and specialty metal products and services for the defence, aerospace, medical device and energy markets. Under the new ownership, ATEP will operate as a standalone business unit and strengthen Alcoa's aerospace and titanium operations.
SAIC / Scitor Holdings - $790m
American technology integrator Science Applications International Corporation (SAIC) acquired national security provider Scitor Holdings for $790m in cash in May, under a deal signed in March.
Scitor provides technology solutions to customers in the US Department of Defense, intelligence community, and other government agencies. The addition of Scitor allows SAIC to expand its intelligence community by providing access to robust security infrastructure, classified contracts and cleared personnel. It also expands SAIC's US Air Force market portfolio.
GKN / Fokker Technologies - $780m (€706m)
GKN Aerospace, a tier-one designer and manufacturer of composite and metallic assemblies for aerostructures and engine products headquartered in the UK, acquired Fokker Technologies from Arle Capital for €706m ($780m) in October.
Dutch aerospace company Fokker Technologies designs, develops and produces landing gear, aerostructures, wiring systems, and services. The takeover allows GKN Aerospace to expand innovative technological offerings and strengthen its ability to meet increased customer needs. It will also help enhance GKN Aerospace's operations in China, India, Mexico and Turkey.
TransDigm Group / Telair International - $725m
TransDigm Group, an aircraft component designer, producer and supplier based in the US, acquired the Telair Cargo Group of businesses from AAR CORP for approximately $725m in cash in March through a definitive agreement executed in February. TransDigm funded the deal through a combination of existing cash in hand and borrowing $75m under its existing revolving credit facility.
Telair Cargo Group supplies cargo handling, restraint systems and unit load devices for both commercial and military markets. It has three operating units, Telair International, Telair US, and Nordisk Aviation Products.
Precision Castparts / Noranco - $560m
MidOcean Partners, a private equity fund investor, and PSP Investments sold Noranco, a company headquartered in Canada, to Precision Castparts Corp, a manufacturer of metal components and products, for $560m in October. MidOcean and its co-investors had acquired Noranco in April 2013 and entered a definitive agreement with Precision Castparts for the sale of Noranco in July 2015.
Noranco supplies complex machined components and assemblies to the aerospace sector. The merger increases Precision Castparts' product offering and strengthen its existing market position in aerostructure, landing gear, aero-engine precision components, and machining capabilities.
RBC Bearings / Sargent Aerospace and Defense - $500m
Dover Corporation's Sargent Aerospace & Defense unit was acquired by RBC Bearings in April for $500m, which was funded through a combination of cash on hand and senior debt. RBC Bearings had entered a definitive agreement for the transaction in March 2015. The acquisition provides additional product offerings to RBC Bearings' customer base.
Sargent supplies precision-engineered customised products and critical aftermarket services for commercial and military aircraft, submarines and land vehicles. Its brands include Sargent Controls, Airtomic, Sonic Industries, Kahr Bearing, and Sargent Aerospace & Defense.
TransDigm / PneuDraulics - $325m
TransDigm Group signed a definitive agreement to acquire PneuDraulics for approximately $325m in July and finally took over ownership in August. The addition of PneuDraulics is expected to provide TransDigm with $107m of tax benefits over the next 15 years.
PneuDraulics, a manufacturer of pneumatic and hydraulic components and sub-systems for commercial, military and commuter aircraft, has roughly 275 employees. PneuDraulics' highly-engineered products and strong aftermarket presence allow TransDigm to expand its offerings on a number of substantial platforms including the Boeing 787 and the Airbus A350.
L-3 / CTC Aviation Group - $220m
Global airline pilot training and crew resourcing specialist CTC Aviation Group was sold to L-3 Communications for $220m in May. The new unit, known as L-3 CTC, expands L-3's civil aviation training business. L-3 CTC, which serves major airlines and retail customers across the globe, will be merged into L-3's Precision Engagement & Training sector in the Electronic Systems segment.
L-3 CTC will provide innovative training, resourcing and simulation solution for military and commercial platforms in collaboration with L-3 Link Simulation & Training UK, also part of L-3's civil aviation training business.