Meggitt Mulls Acquisitions, Eyes Makers of Sensors and Equipment
Meggitt Plc (MGGT), a U.K. maker of aircraft engine sensors, wheels and brakes, has further appetite for acquisitions after spending $685 million to buy Pacific Scientific Aerospace last year, its chief executive said.
“We like sensors; we’d be interested in buying more sensor businesses,” Chief Executive Terry Twigger in an interview after reporting earnings. “We also like engine equipment, because there’s a good after-market on that. And our energy business has been growing rapidly, so we could be interested in bulking up that business a bit.”
Meggitt is looking at a number of companies which, if they came to market in 2012, would provide interesting targets, Twigger said, adding that no transaction is imminent. The company, based at Bournemouth airport in Christchurch, England, has made progress in reducing its level of debt expressed as a ratio to earnings before interest, tax, depreciation and amortization, bringing it down to 1.7 at the end of 2011 from 1.9 a year earlier, he said.
“There is scope in there to give us some headroom for acquisitions,” Twigger said.
Meggitt fell 2.3 percent to 391.1 pence at 9:46 a.m. in London. The stock has gained 11 percent so far this year.
The company last year bought Pacific Scientific Aerospace from Danaher Corp. to expand its range of fire-fighting products. Twigger today said integration of that acquisition was going well, allowing the company to raise its synergy targets by 25 percent.
In the past, shareholders have been receptive to equity offerings to help fund acquisitions if need be, and Twigger said he expected that to remain the case in the future.
Meggitt sells components and sub-systems for aerospace, defense and energy markets, with products including pilot displays, braking systems, fire-detection systems, and oxygen. Key customers include the U.S. military, Boeing Co. (BA), European Aeronautic, Defence & Space Co., and Bombardier Inc.
Sensors measure conditions such as temperature or vibrations inside an engine.
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