MRO provider ST Engineering has significantly enhanced its production capabilities by agreeing to acquire nacelle manufacturer MRAS from GE for $630 million.
The purchase price translates to 10 times MRAS’ earnings before interest, tax, depreciation and amortization, and will be made through Vision Technologies Aerospace, the Singaporean company’s US subsidiary.
ST Engineering’s existing OEM capabilities include the manufacture of composite floor panels, so a move into nacelle production is a logical step given the wide use of carbon fiber in those aerostructures.
The A380 nacelle was the first commercial nacelle to be more than 50% carbon fiber and the lightweight material was even more widely used in the A320neo nacelle, which MRAS is involved in.
“The proposed acquisition will allow ST Engineering to scale up its aerospace capabilities by moving the company into the OEM business of high-value nacelle components and replacement parts,” states ST Engineering.
MRAS and Safran have a joint venture that is the exclusive manufacturer for the CFM LEAP-1A nacelle on the A320neo and the CFM LEAP-1C nacelle on the Comac C919. MRAS is also a supplier on the ARJ21 and on Bombarider business jets, although growth in A320 production is its major selling point.
“Moving upstream into the business of design and manufacturing of nacelles will allow us to benefit directly from the robust growth of the global aircraft fleet as an OEM, and enable us to serve our customers better through an enhanced suite of products and services,” said Lim Serh Ghee, president of ST Engineering’s aerospace division.
Th acquisition will also further strengthen ST Engineering’s US presence. In June the company opened a $46 million MRO facility in Florida with UPS as its initial customer.