Global Fastener News

Precision Castparts to Acquire SPS Technologies

John Wolz

Precision Castparts Corporation will acquire fastener manufacturer SPS Technologies Inc. for about $575 million, as consolidation in the defense industry spreads to two smaller players.\
Jenkintown, PA-based SPS is marking its 100th anniversary this year.
Portland, OR-based Precision Castparts already is involved in the fastener industry through its machinery tooling group � PCC Specialty Products Inc. Holdings include Reed-Rico, Astro Punch, Drop Dies & Forgings, Engineers Group and Lewis Machine. PCC has a joint venture with Kadimi Tool Mfg. Co. of India.
Precision Castparts said the offer is worth about $43.78 per SPS share, representing a 28% premium on SPS�s Friday NYSE closing price of $34.30 and a premium of 41% to SPS�s average closing price over the last month. The deal is scheduled to close during the fourth quarter. Including assumption of debt, Precision valued the transaction at $729 million.
Precision Castparts said the acquisition will further diversify its business, especially opening into the automotive sector, which represents about one-quarter of SPS 2002 sales of $830.3 million.
The two companies, which have many of the same customers in the aerospace and gas-turbine industries, have been negotiating the transaction for several months.
SPS makes fasteners for the aerospace business, but it also serves other industries such as auto, rail and construction-equipment manufacturers.
Following the deal�s completion, some 50% of Precision�s sales will come from aerospace, compared with 53% currently. General industrial businesses will make up 23% of the company�s sales, up from 11% now. The company also makes products for the fluid-management and paper and pulp industries.
Precision, with some 11,400 employees and 57 plants, reported revenue of $2.6 billion in 2002. SPS brings to the combination about 5,700 employees and 35 manufacturing plants. �2003 FastenerNews.com