Aerospace fastener suppliers are getting caught in Boeing’s 737 MAX web.
Stanley Black & Decker has agreed to acquire Consolidated Aerospace Manufacturing LLC (CAM) for as much as $1.5 billion cash.
The deal is contingent on the Boeing 737 MAX returning to service and on Boeing meeting certain production goals.
“Being part of such a capable industrial company will enable us to further expand our company’s resources globally, including accelerating the development of new products and pursuing acquisitions, allowing us to better serve the needs of our customers,” stated CAM CEO Peter George.
George added that in recent years CAM has “invested heavily in upgrading the equipment and facilities of the businesses we integrated, in addition to strengthening our engineering and management resources.”
Stanley Black & Decker CEO James Loree called CAM “an ideal platform asset to scale within our Engineered Fastening business and significantly adds to our exposure in the high growth, high margin aerospace and defense segment.”
Brea, CA-based CAM, which manufactures aerospace fasteners, fittings, couplings, latches, quick release pins, tubing subassemblies and other components and assembled products, was launched by Tinicum in 2012 as a holding company for eight aerospace component manufacturing firms. Among CAM’s holdings are Bristol Industries, E.A. Patten, Aerofit, Voss Industries, 3V Fasteners, QRP and Moeller. Web: camaerospace.com
CAM will become part of Stanley Black & Decker’s portfolio of engineered fastening & component solutions, adding a platform within the company’s Industrial segment for growth.
Stanley Black & Decker has spent more than $10 billion on acquisitions in the last two decades. In 2018, Stanley Black & Decker completed its $440 million acquisition of Nelson Fastener Systems. Elyria, OH-based Nelson Fastener manufactures fasteners for the aerospace, automotive, construction, energy, industrial and military markets. Web: StanleyBlackandDecker.com
The acquisition news came days after Arconic said it expects to lose $400M in sales and could cut jobs this year as a result of Boeing’s halted production of the 737 MAX, according to SeekingAlpha.
Uncertainty over MAX production is the biggest challenge facing Arconic in 2020, prompting Arconic to consider staff cuts, extended vacations and shift pattern changes, CEO John Plant stated during an earnings conference call.
While business for Airbus jetliners and military aircraft is strong, it is difficult to switch workers to alternative products, Plant explained.
His comments came after Arconic reported revenue in its Engineered Products & Forgings segment, primarily from fasteners, rose 5% to $7.1 billion in 2019. Segment operating profit increased 26% to $1.39 billion, while profit margin gained 330 basis points to 19.6%.
EP&F capital expenditures dropped 15.5% to $344 million during the year.
Consolidated Arconic revenue edged up 1% to 14.2 billion in 2019, while net income declined 26.8% to $470 million.
“In 2019, the Arconic team delivered improved revenue, adjusted operating income, adjusted operating income margin, adjusted free cash flow and adjusted earnings per share,” Plant added.
The company said separation is on track for April 1. The EP&F businesses will remain in the existing company, which will be renamed Howmet Aerospace Inc. at separation, while the GRP businesses will be named Arconic Corporation at separation. Web: Arconic.com
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