Meggitt in buying spree

Plans include shortlist of 18 possible purchases and selling its controls businesses

By Melanie Tringham

Meggitt, the Dorset-based aerospace and electronic components company, plans to hit the acquisition trail in the next 12 months, according to Mike Stacey, chief executive.

`We are looking at acquisitions. We would either like to have made an acquisition or two by this time next year or be in a very advanced state of completing one,’ said Stacey. He has drawn up a shortlist of 18 possible purchases, some of which are divisions of major companies. These include parts of LucasVarity, where Stacey previously ran the aerospace division.

Meggitt can spend at least £20m, based on raising its 15% gearing levels to 50%.

The company has just completed a two-year disposal and restructuring programme. Stacey said it is strongly focused on aerospace and electronics. He indicated that its industrial controls businesses, Mobrey and Heatric, which account for 20% of the company’s £250m turnover, could be sold off.

This is being considered because of the division’s disparity with the rest of the business.

`If we were to say what would Meggitt look like in five to 10 years, controls may not appear there,’ said Stacey. `It might go simply because of the expertise in the company – controls are in the third marketplace after aerospace and electronics, and understanding the technology of the market place is as important as the technology itself.’

Mobrey suffered a 2% drop in sales last year and many observers believe it to be a poor performer next to its sister company, Heatric.