MB Aerospace Holdings Ltd, one of the UK’s leading aerospace companies, has announced a multi-million pound acquisition of US-based Gentz Industries.
The strategic acquisition doubles the size of MB Aerospace’s current operations creating an international brand with total annual revenues in excess of $80 million.
The group will focus on the supply chain management, manufacture and repair of highly complex machined and fabricated components for global aerospace and defence original equipment manufacturers.
The Motherwell-based group completed the sale of its two non-core subsidiaries, MB Faber (in August 2009) and MBAe Oil & Gas (March 2011), as part of its strategy to focus on its key aerospace business, while providing additional capital to support the funding of the US deal.
Gentz Industries, based in Detroit, North Michigan, has an outstanding reputation within the global aerospace industry, manufacturing complex, high-precision engine components to an established customer base, comprising some of the leading names in the global aerospace market.
Key customers of Gentz include Pratt & Whitney, Hamilton Sundstrand, Rolls-Royce, Mitsubishi Heavy Industries, Volvo Aerospace and the US Department of Defense.
The deal will see the merger of Gentz Industries’ 250 strong workforce with MBAe’s three UK sites in Scotland and England, bringing the total number of employees in the group to more than 400.
Strategy for international growth
Craig Gallagher, Chief Executive of MB Aerospace Holdings Ltd, said: “This multi-million dollar acquisition is part of our long-term strategy to grow our core aerospace business internationally.
“We see strong synergies between the US and UK operations with two very distinct customer bases providing the opportunity to leverage the capabilities and strengths of both businesses into new markets, whilst securing employment and supporting the rapid growth of the business on both sides of the Atlantic.
“In order to support the growth of our customers in the US and UK, as well as achieve our ambitious expansion plans, we're investing in the development of our workforce and state-of-the-art equipment.”
MBAe will support the Gentz business through its experience in global aerospace and defense supply chains and will offer its unique solution to US original equipment manufacturers for the fragmented and underperforming parts of their legacy supply chains.
Market growth forecast
The market for gas turbines is forecast to grow significantly over the next 20 years with strong demand for aero-derivative, power generation and industrial gas turbines.
Independent forecasters expect more than 30,000 new aircraft to be delivered in the next two decades, with the total size of the airline fleet currently in service expected to more than double.
This growth is being fuelled by the rising demand for travel in Asia coupled with the need of European and American airlines to replace ageing aircraft.
The high level of demand for new-build airliners and the continued growth in global energy usage (which is often powered by gas turbines) make this sector a highly attractive industrial market for the foreseeable future.
Lena Wilson, Chief Executive of Scottish Enterprise, said: "Our work with MBAe over the last five years has highlighted the management team's outstanding ambition and determination to build on its success and push for international growth.
"With the acquisition of Gentz Industries, MBAe is now well positioned to grasp US opportunities and build its reach and capabilities quickly in this new market, and we're already working with them to maximise these opportunities.”