Aerospace and defence group Meggitt is to buy the design and manufacturing division of Dunlop Standard Aerospace, the aviation systems specialist, with contracts on the Airbus A380 and Joint Strike Fighter programmes.
Dorset-based Meggitt will pay £408m for the Dunlop business, its biggest ever acquisition. The company claimed Dunlop’s activities, including wheels, brake systems and specialist polymer products, would fit well with its existing technologies and product range.
The Meggitt deal is half of a twin-track sale of Dunlop by Doughty Hanson, the investment group that has owned the company since buying it from BTR (now Invensys) in 1998.
Doughty Hanson will sell the other chunk of Dunlop, its engine repair and overhaul division, to US investment giant Carlyle Group for £415m. Each half of the deal is conditional on the other beingsuccessfully completed.
The purchase of Dunlop’s design and manufacturing division would add about 1,500 people and £120m worth of sales to Meggitt’s existing operations. The group currently employs 3,500 with a turnover of £400m.
The Dunlop business is based in Coventry, with other sites inLeicestershire, Birmingham, Singapore, Belgium and the US. Like many companies active in the civil aerospace sector, Dunlop suffered in the aftermath of September 11 and the downturn in the airline industry. However, it remained profitable and invested heavily in technology R&D.
Meggitt claimed the acquisition would benefit it across two broad fronts. It will gain access to a range of technologies developed within Dunlop, for example advanced carbon brakes and precisionengineered heat exchangers.
Meggitt said these will be added to its existing products and technologies to give it a strong position in areas such as electronic braking systems.
Second, the deal will give Meggitt an instant foothold in the Joint Strike Fighter and the Airbus A380 ‘superjumbo’ programmes.Dunlop is working with Honeywell on wheels, brakes and engine coolers for the JSF and the wheels and brakes of the A380. It also has positions on Eurofighter, Rolls-Royce’s Trent engine and the Gulfstream G550 jet.
According to Meggitt, the A380 could be particularly fruitful for its new Dunlop division. It said the company is working with Airbus on ‘very significant’ long-term technology development programmes for the new aircraft.
Meggitt also said it should be possible to save £5m each year from areas where Dunlop overlaps with its existing operations.