Meggitt Plc, the U.K. maker of engine-monitoring systems for Airbus SAS and Boeing Co. planes, agreed to buy Pacific Scientific Aerospace from Danaher Corp. for $685 million to expand its range of fire-fighting products.
The purchase of PSA, which also makes generators, electric motors and other safety gear for aircraft, will be funded by selling as many as 69.8 million shares, equal to about 9.09 percent of the company, to new and current institutional investors, Meggitt said today in a statement.
Adding the Danaher unit will allow Meggitt to bundle together more products for aircraft including Boeing’s 787 Dreamliner and the Airbus A380 superjumbo as production accelerates. Meggitt paid 8.7 times earnings before interest, tax, depreciation and amortization and it estimated savings of about $5 million in 2011, rising to about $18 million by 2014.
The purchase “will enhance Meggitt’s offering of electric aircraft solutions as aircraft of the future shift away from hydraulic/ pneumatic technology towards electric power,” Chief Executive Officer Terry Twigger said in the statement.
Meggitt fell as much as 17.8 pence, or 4.8 percent, to 352.7 pence in London, the sharpest fall since May 25 and traded at 363.8 pence at 8:20 a.m., valuing the company at 2.54 billion pounds ($4.06 billion).
The business had revenue of about $378 million in 2010 and contributed 7 cents to the U.S. company’s earnings per share, Washington, D.C.-based Danaher said in a separate statement today.
Rothschild advised Meggitt on the transaction.
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