Global Fastener News

PCC Shopping for More Fastener Firms

Jason Sandefur

Precision Castparts Corp. will sell its Fluid Management Products segment to focus on the fastener industry. The announcement comes less than 12 months after PCC acquired Jenkintown, PA-based fastener manufacturer SPS Technologies for about $893 million in December 2003.
“As we have developed and applied a strategic framework for profitable growth in the years ahead, the pump and valve businesses do not fit with our core competencies and strategic objectives,” stated CEO Mark Donegan. The move reflects PCC”s goal of making critical parts in highly engineered operations. Two-thirds of the company’s $2.2 billion in annual revenues comes from making large parts for jet engines and gas-turbine engines.
Donegan credited the fluid management businesses for helping to bolster PCC’s earnings and cash flow over the past three years, “adding stability at a time when our core markets were experiencing unprecedented downturns.”
“Now, however, as our aerospace and power generation markets begin to recover, and the SPS operations continue to deliver strong results ahead of expectations, we feel that it is the appropriate time to divest these assets,” Donegan noted. “Our goal is to redeploy the sale proceeds from pumps and vales in value-added acquisitions.” Donegan said PCC is already pursuing several potential candidates that “fit squarely within our core competencies.”
Donegan said the Portland, OR-based corporation sees a strong future in fasteners and other critical application parts. “Fiscal 2005 is shaping up to be a very strong year,” Donegan explained. “”Significant market share gains and healthy after-market sales in our core aerospace and industrial gas turbine markets, coupled with continued, solid performance in our SPS operations, are driving increased sales and operating margins.”
Following the divesture, PCC will report its results in four segments. Web: precast.com �2004 FastenerNews.com