Black Country engineering group Hampson Industries has acquired two US tool manufacturers in a £158.2 millon deal designed to support its expansion into the high-growth aerospace tooling systems sector.
Odyssey Industries and Global Tooling Systems, both based in Michigan, are leading suppliers of large, close tolerance tooling systems and services for the commercial and military aerospace industries.
Hampson, which has been expanding into the composite component sector, said it believed the deal would make it the largest independent manufacturer of tooling systems for composite aero structures in the world, in terms of revenue and customer penetration.
Brierley Hill-based Hampson said £107.5 million would initially be paid in cash with the remaining balance to be satisfied by the issue of 14.9 million new shares in the company and deferred payments on the remaining £30.6 million dependent on the combined performance of Odyssey and GTS in 2008.
Hampson hopes to raise around £65 million through the placing of shares, valued at 135p each, representing 9.4 per cent of the group’s enlarged share capital. The company said an open offer will be carried out on the basis of one open offer share for every four existing ordinary shares held.
Odyssey specialises in the design and manufacture of invar bond tools, which are used in the manufacture of large aero structural components made from carbon composite materials.
GTS’s principal areas are complex, integrated tooling solutions for carbon composite component manufacture and high-level airframe assemblies.
Both firms supply to a number of the latest generation of commercial and miliary aircraft platforms including the Boeing 787 Dreamliner and F-35 Joint Strike Fighter.
Odyssey and GTS have both demonstrated strong growth over the past two years and they have consciously focused their work on providing tooling solutions for aerospace composite structures and have benefitted from the industry trend towards increased composite content in new generation aircraft.
The acquisitions are expected to substantially increase Hampson’s direct and indirect exposure to the increased use of carbon composites and they build on other recent US acquisitions - Texstars, Coast Composites and Composites Horizons.
For the year ended December 31, 2007 Odyssey and GTS reported a combined operating profit of £13 million and as of the same point, had a combined order book of around £37.5 million.
In a statement, Hampson’s said: "The acquisitions, which are inter-conditional, are in line with Hampson’s growth strategy of making carefully targeted acquisitions of businesses with perceived high performance potential and niche products or processes that are complementary to the group’s existing operations.
"The board believes that the proposed acquisitions when positioned alongside the group’s current composite tooling component operations, would make Hampson the largest independent manufacturer of tooling systems for composite aero structures in the world (by revenue and customer penetration) and offer an excellent opportunity to accelerate the growth strategy this is already in place."
The acquisitions are expected to enhance earning per share in the year ended March 31, 2009.
However, chief executive Kim Ward said he expected the firms to begin contributing to the group’s overall development from day one.
"The acquisitions are consistent with our strategic push into high-margin, high-growth aerospace composite component and tooling systems manufacture over the last three years," he said.
Odyssey and GTS have very strong positions in the market sectors in which they operate and in combination with our existing operations, make Hampson the leading independent aerospace tooling supplier in this global market."
The deal is subject to shareholder approval at a meeting scheduled for June 3.