Meggitt PLC to acquire Electric products & safety business Pacific Scientific Aerospace (PSA) from Danaher Corporation

Meggitt PLC is to acquire Pacific Scientific Aerospace (PSA) from Danaher Corporation (Danaher) for $685 million in cash (Acquisition). Meggitt announced it had reached an agreement for the acquisition with PSA. The Acquisition will be funded in part by an equity placing of up to 69.8 million new ordinary shares, representing less than 10% of Meggitt's current issued share capital; the balance will be funded from existing debt facilities.

Pacific Scientific specializes in supplying electric power, electric linear actuation, safety and security products to commercial (57% of sales) and military aerospace (43% of sales) customers.  The business generated US$378 million in revenues and an operating profit of US$79 million in 2010.  Meggitt expects the acquisition to be immediately earnings enhancing.

Danaher also confirmed that it had received a binding offer from Meggitt to acquire its Artus business which remains open for 12 months.

Meggitt received financial advice from Rothschild in the Acquisition. BofA Merrill Lynch is acting as corporate broker for Meggitt. The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Merrill Lynch International, who is acting as sole book runner.

The timing of the closing of the book, pricing and allocations are at the discretion of Meggitt and BofA Merrill Lynch, said the firm. The number of Placing Shares and the price at which the Placing Shares are to be placed are subject to agreement between Meggitt and BofA Merrill Lynch at the close of the book-building process, read the firm’s press release.

Danaher Corporation designs, manufactures, and markets industrial and consumer products. Located in 30 countries worldwide, its two principal business segments are: Process and Environmental Controls, which includes products such as electronic test tools, product identification equipment and consumables.

Others include water quality instrumentation and consumables, retail petroleum automation products, underground storage tank leak detection systems, and motion, position, speed, temperature and level instruments and sensing devices; and Tools and Components, a producer and distributor of general purpose and specialty mechanics' hand tools in the US.

Meggitt Plc is a U.K. based maker of engine-monitoring systems for Airbus SAS and Boeing Co. planes. Adding the Danaher unit will allow Meggitt to bundle together more products for aircraft including Boeing’s 787 Dreamliner and the Airbus A380 superjumbo as production accelerates. Meggitt paid 8.7 times earnings before interest, tax, depreciation and amortization and it estimated savings of about $5 million in 2011, rising to about $18 million by 2014.

19 Jan 2011.