Precision Castparts Corp
) intends to acquire Klune Industries, a manufacturer of complex
aluminum, nickel, titanium and steel aerostructures. The all-cash
acquisition is expected to be accretive to earnings
The transaction is expected to be completed by the second
quarter of fiscal 2013, subject to regulatory approval. After the
completion of the deal, Klune will become a part of Precision's
Fastener's products segment.
The acquisition of Klune may be considered a strategic move by
Precision, as the companies complement each other in several ways.
Klune not only provides product and operational synergies, but the
location of its facilities also indicates geographical
Klune's sheet metal and fabrication capabilities are expected to
be a perfect addition to Precision's existing aerostructures
product offerings. Earlier, Precision used to buy castings,
forgings and fasteners, but now after its acquisitions of Centra,
Primus and Klune, these can be supplied internally. Additionally,
their expertise in machining castings adds to the company's own
aerostructures manufacturing capabilities.
After experiencing high volatility in the recent past, the
global aerospace industry is beginning to look up.
Elevating global demand for airline travel, continued production of
Dreamliner (787) and A320 by Boeing and Airbus respectively, are
expected to drive the global aerospace demand from 2013 through
Therefore, with this trend in mind, leading aerospace
manufacturers are opting for strategic acquisitions to gain cost
synergies and benefit from this forthcoming demand. In, the recent
), the leading manufacturer of aerospace products and the world's
leading supplier of aircraft engines acquired Goodrich Corporation
for $18.4 billion. Goodrich is a global supplier of systems and
services to the aerospace and defense industry with estimated 2011
sales of $8 billion. Its products include aircraft landing gear,
aircraft wheels and brakes.
From a top-line perspective, Klune's product line is expected to
significantly increase Precision's dollar content on the
) 787. In addition, Klune also has solid positions on other major
aircraft platforms, such as the Boeing 737 and Gulfstream G650.
Klune primarily focuses on complex forming, machining, and
assembly of aerostructures parts, apart from offering significant
expertise in a range of cold-formed sheet metal components.
Precision Castparts Corp. is a diversified manufacturer of
complex metal components and products. It serves the aerospace,
power and general industrial markets. PCC is the market leader in
manufacturing large, complex structural investment castings,
airfoil castings, forged components, and highly engineered,
critical fasteners for aerospace applications.
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