Global Fastener News

2011 FIN – Alcoa Expands in Aerospace With McKechnie Deal

February 02
00:00 2015

February 2, 2011 FIN – Alcoa Fastening Systems “significantly strengthens” its aerospace fastener product lines by acquiring Valley-Todeco and Linread, an industry acquisitions expert said.

Alcoa announced this week it will acquire the aerospace fastener manufacturing portion of McKechnie Aerospace Holdings Inc. for $240 million.
TransDigm Group Inc. acquired McKechnie less than two months ago for $1.27 billion.
Richard Hagan of New York-based Pinnacle Capital told GlobalFastenerNews.com that the Valley-Todeco Inc. and Linread Limited divisions of McKechnie”significantly strengthen the AFS product offering with respect to aerospace bolts and nuts for both airframe and engine applications.”
In addition to hot-forged and cold-headed male and female fasteners, Valley-Todeco also manufactures spherical, slotted-entry bearings used in a diverse range of airframe applications, Hagan noted.
“The bearing division of Valley-Todeco is a highly-attractive niche business which expands the AFS product range into new territory,” Hagan pointed out.
The McKechnie fastener operations are comprised of two companies: Valley-Todeco of Sylmar, CA; and Leicester, UK-based Linread. The two companies employ a total of 400 people and manufacture a range of high-strength, specialty-alloy threaded fasteners and spherical, slotted-entry bearings for the aerospace market.
According to filings by TransDigm, the fastener operations of McKechnie generated net sales of $65 million or approximately 22% of total net sales for McKechnie in the 12 months ended Sept. 30, 2010.
When the Alcoa/McKechnie fastener transaction is completed, TransDigm will have recouped 19% of the purchase price paid for McKechnie, while divesting 22% of the trailing annual net sales acquired, Hagan analyzed.
Earnings and cash flow figures for the McKechnie fastener operations were not disclosed.  McKechnie as a whole generated EBITDA of $101.2 million in the 12 months ended Sept. 30, 2010, so TransDigm paid 12.5 times trailing EBITD, Hagan calculated.  “Given the circumstances, it seems very likely that AFS paid a comparable multiple of EBITDA (12.5 times) for the McKechnie fastener operations.”
The acquisition is expected to be completed during the first quarter of 2011, subject to customary regulatory reviews and approvals.
Alcoa Fastening Systems, a business unit of Alcoa, is a worldwide designer and manufacturer of specialty fastening systems, components, and installation tools for aerospace and industrial applications. Headquartered in Torrance, California, Alcoa Fastening has over 5,500 employees and operates 29 locations in 10 countries. ©2011/2015 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

Alcoa Completes Aerospace Acquistion

March 9, 2011 GFN – Alcoa completed its $240 million acquisition of the aerospace fastener business of TransDigm Group Inc., a global designer, producer and supplier of highly engineered aircraft components. Total after tax cash proceeds from this transaction are estimated to be approximately $170 million.
The new business will become part of Alcoa Fastening Systems.
“This acquisition is an important step for Alcoa Fastening Systems (AFS),” Alcoa Fastening Systems president Vitaliy Rusakov said when the deal was announced in December 2010. “It is a part of our strategic plan to accelerate the growth of our business, add efficiencies, broaden our technology base and expand our product offering to better serve our customers and increase shareholder value.”
The deal comes weeks after TransDigm acquired the fastener business when it purchased McKechnie Aerospace in December 2010 following a bidding war with other aerospace companies, including Precision Castparts Corp.
The three TransDigm fastener manufacturing facilities are located in Sylmar, California; and Redditch and Leicester, both of the United Kingdom, and employ a combined 400 people.
Since they were founded in 1925 and 1950s respectively, the Redditch, Sylmar and Leicester facilities have provided a wide variety of high-strength, high temperature nickel alloy specialty engine fasteners, airframe bolts and slotted entry bearings.
According to filings by TransDigm, the fastener operations of McKechnie generated net sales of $65 million or approximately 22% of total net sales for McKechnie in the 12 months ended Sept. 30, 2010.
Alcoa Fastening Systems, a business unit of Alcoa, is a leading worldwide designer and manufacturer of specialty fastening systems, components, and installation tools for aerospace and industrial applications. Headquartered in Torrance, California, the company has over 5,500 employees and operates 29 locations in 10 countries.
©2011/2014 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

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