Actuation Systems to be Acquired from BAE
Smiths Industries PLC
22 February 2000
Smiths Industries to acquire Actuation Systems business from BAE SYSTEMS
With its second aerospace acquisition this year, Smiths Industries will be
adding further to its aircraft equipment and components activities with the
acquisition of the Actuation Systems subsidiary of BAE SYSTEMS North America,
for $100 million (£63 million). This follows the $175m acquisition of the
aerospace division of Invensys plc, completed at the end of January. Together,
these deals support the development of a key product area for Smiths Industries
Aerospace - the control and management of aircraft utilities.
Chief executive Keith Butler-Wheelhouse said: 'We are already among the world
leaders in avionics and are now building a core business in systems outside
the cockpit. We are adding to our activities in power distribution with the
manufacture of associated sub-systems and equipment which control many vital
functions. Both Actuation Systems and the business acquired from Invensys are
at the forefront in the development of this control equipment for utility
systems.'
Essential to the safe and efficient operation of commercial and military
aircraft, 'utilities' range from electrical power generation to environmental
controls. In complete systems of varying size and complexity, they combine
mechanical, electrical, hydraulic and electronic equipment. Increasingly they
are required to function automatically, monitored from the cockpit, and
collectively can represent up to 20 per cent of the value of equipment on a
new aircraft.
The acquisition of Actuation Systems extends Smiths Industries' control
technologies into systems located throughout the aircraft. Through its
increasing involvement in these utilities, the company aims to strengthen its
position as a first-tier supplier of highly integrated systems to the aircraft
prime manufacturers.
Actuation Systems is a leading US supplier of electrically-operated actuators
which provide precise control for utility systems on commercial and defence
aircraft, and military land vehicles. It has also built a substantial
aftermarket support operation, serving its wide customer base. With its
extensive skills in design and build, the company has evolved from a component
manufacturer into an integrator of increasingly complex systems.
It has formed close customer relationships with the major aircraft makers,
such as Boeing, Lockheed Martin and Raytheon, and is building additional
business supplying actuation systems for other leading aerospace sub-systems
manufacturers. The company, Marconi Actuation Systems Inc., employs 290 people
located at Whippany, New Jersey, and joined BAE SYSTEMS last year.
Sales by Actuation Systems for the year to 31 March 1999 were $46.8 million,
on which it earned profits of $9.4 million, before interest and tax. It has a
strong position on a number of key commercial and defence programmes, offering
good growth prospects for at least the next five years. The book value of net
tangible assets being acquired is approximately $24 million.
The consideration will be paid in cash, on completion, which is expected
within one month, and is subject to approval by the US regulatory authorities.
In addition to advanced aerospace systems and equipment, Smiths Industries is
a leading supplier of medical systems and specialised industrial products.
Further information is available on the company's website:
www.smiths-industries.com.
Press enquiries to:
Russell Plumley or Richard Bayliss
Tel: 020 8457 8203
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