Eaton Aerospace hopes to complete the $333 million acquisition of seal, duct and valve specialist PerkinElmer Aerospace in December, marking the latest stage in its aggressive strategic expansion plan to develop an all-embracing air, fuel, hydraulic and lubrication system capability.
Eaton’s long-term plan to become a wider systems provider was strengthened on 1 November when it completed the $270 million purchase of the aerospace fluid and air division of UK-based Cobham. The division includes FR-HiTemp, which provides low-pressure fuel systems, electro-mechanical actuation, air ducting, and hydraulic and power generation; and Stanley Aviation, which produces distribution systems for fuel, hydraulics and air.
Together, the two acquisitions will boost Eaton Aerospace’s sales to more than $1.2 billion, against estimated year-end 2005 sales of $875 million, while worldwide employees will grow from 3,600 to around 5,000. “We believe you can only do true system optimisation if you have intimate knowledge of the components in that system,” says aerospace operations president Bradley Morton. “That’s the basis for our strategy, and that’s why it is different to most of the others,” he adds.
“Through Cobham we are moving into fuel systems, and with PerkinElmer we are moving a big way into air systems. Together they provide us with more capability to offer higher value to the engine manufacturers as a supplier of hydraulic, lubrication, fuel or air systems.” Morton says the creation of greater systems capability also fits the simpler supply chain vision promulgated by Airbus, Boeing and the engine makers, as well as increasingly by the military manufacturers such as Lockheed Martin and Northrop Grumman. “The industry is screaming out for more efficiency in the supply lines, and at the same time is looking for greater optimisation,” he says.
Further acquisitions are planned, although Morton says the immediate focus is on completing the integration of the latest purchases. New target areas include sectors such as more “technology on the fuel [system] side”, and in electro-mechanical actuation.
“It’s another growth area for us,” says Morton, who adds that “the good news is the company is still eager for growth”. Although the company’s commercial:military balance is well established at around 50:50, Eaton is still intent on spreading the portfolio across more segments.
“Large commercial is around 27% and across other segments it is similar, with a few in single digits. We feel we have a good and healthy balance, but we’d like a stronger position in regional aircraft and rotary-wing aircraft,” says Morton. In these sectors Eaton is already a large-scale systems supplier to the Chinese AVIC I ARJ21 regional jet, and Bell Boeing V-22 and Bell/Agusta Aerospace BA609 tiltrotor programmes. “Through to the end of the decade we have an opportunity to break that [$2 billion sales] barrier,” says Morton, who says that Eaton sees up to a 25% improvement in revenues “just associated with core growth, plus an additional 20-30% with new platforms”.
Eaton is now involved with the Eurofighter Typhoon, for example, through its new acquisitions, but is already heavily involved in major new aircraft such as the Airbus Military A400M, Airbus A380, Boeing 787, Embraer Phenom 100 very light jet and Lockheed Martin F-35 Joint Strike Fighter aircraft programmes.
GUY NORRIS/LOS ANGELES
Source: Flight International
