Parker Aerospace Adds Capabilities On Closing Meggitt Takeover
LONDON—UK-based aerospace supplier Meggitt has become part of U.S. motion and control specialist Parker-Hannifin, after the closing of a £6.3 billion ($7.3 billion) acquisition that nearly doubles the size of Parker Aerospace.
Through the acquisition, Parker is gaining additional competences in braking systems, advanced engine sensors, safety systems, engine valve and actuation, electric power and thermal management. Another key attraction was Meggitt’s British defense contracts, which diversify Parker’s revenues, contributing to both the defense and international streams.
Meanwhile, the newly acquired Meggitt business will gain greater access to Parker’s specialist areas including flight controls and hydraulics, and fluid systems, including fuel tank inerting, fluid conveyance and lubrication.
Both Meggitt and Parker Aerospace are suppliers to major OEMs, including Airbus and Boeing. As part of the European Commission’s antitrust clearance for the deal, Parker-Hannifin had to commit to divest its aircraft wheels and brakes business, including a plant in Avon, Ohio.
Meggitt, headquartered in Coventry, England, has products on almost every major aircraft platform. The company turned over £1.63 billion for the 12 months ending June 30 and employs more than 9,000 staff around the world.
The substantial cash deal, agreed in August 2021, was confirmed as completed on Sept. 13; on track with anticipated closure in the 2022 third quarter.
Meggitt shareholders received 800 pence per share and the company delisted from the London Stock Exchange after market close on Sept. 14.
Parker says the transaction will drive significant shareholder value through increased organic growth prospects and stronger cash flow. Management expects the merger to increase Parker’s earnings per share, excluding one-time costs and deal-related amortization.
Parker says it will continue to invest in Meggitt’s key markets and that a joint integration team will manage the transition following the ownership change. The companies say it will be “business as usual” from day one.
Tom Williams, chairman and CEO of Parker Aerospace parent company Parker-Hannifin Corporation, describes the acquisition as “a very compelling strategic and cultural combination.” He says Meggitt will “significantly enhance” Parker’s capabilities in aerospace components and systems.
Further details about the acquisition, and its impact on Parker Hannifin’s outlook for fiscal 2023, will be released Sept. 28.