30th Jan 2006 07:01
Senior PLC30 January 2006 28 January 2006 Senior plc Acquires Sterling Machine Co., Inc Senior plc ("Senior") is pleased to announce that it has acquired SterlingMachine Co., Inc ("Sterling"), a manufacturer of precision machined parts forthe aerospace industry, based in Enfield, Connecticut, USA. The cashconsideration, including assumed net debt, was $37.6m (£21.1m(1)) of which $2.1m(£1.2m(1)) related to the purchase of property. The acquisition is expected tobe immediately earnings enhancing. Sterling is a manufacturer of precision metallic parts for the aerospaceindustry using state-of-the-art production and process control systems tomachine steel, aluminium, magnesium and titanium parts from bar stock, forgingsand castings. The company is a pre-eminent manufacturer of transmission androtor-head helicopter components for military platforms, principally to itslargest customer, the Sikorsky Aircraft Corporation ("Sikorsky"). Sikorsky isforecasting healthy increases in helicopter build rates over the next fiveyears, predominantly for military applications, with the demand increasing as aresult of both major modification and new start programmes. Sterling, a family business, was founded in Enfield, Connecticut, in 1956 andhas been owned by two brothers, Greg and Tom Caravella, since 1994. GregCaravella will be staying on with the company for up to six months postacquisition to assist with the transition to Senior. In 2003, due to continued expansion, the business relocated to a new purposebuilt factory investing at the same time in a number of new modern machines. Theproperty, owned by the Caravella brothers through a separate legal entity, waspurchased by Senior as part of the transaction. For the year to 31 December 2005, Sterling's results (unaudited) recorded salesof US$18.8m (£10.6m(1)) and profit before interest and tax of US$4.2m (£2.4m(1)). As at 31 December 2005 gross assets, including property, were US$15.7m(£8.8m(1)). The acquisition of Sterling is in line with Senior's strategic objective tofocus on the aerospace and automotive original equipment markets and the Boardof Senior believes that the acquisition of Sterling offers many benefits andopportunities including: • The acquisition of a well established, well managed, profitable business enjoying a high level of customer loyalty;• The addition of a major new customer, Sikorsky, to the Aerospace Division;• Entry into a growing military helicopter market;• The purchase of a modern facility with expansion opportunity; and• The benefit of additional Group sales with minimal increase in central and divisional costs. Senior's trading remains in line with the pre-close statement of 19 December2005. Commenting on the acquisition, Graham Menzies, Chief Executive, Senior plc, said"This is a significant development for Senior, being the first acquisition theGroup has undertaken for six years. The Group is very pleased to have acquiredSterling, a profitable aerospace business with a strong market position,excellent management and good growth prospects. The acquisition, together withthe continuing growth of the general aerospace industry, the Group's growingautomotive prospects, particularly in diesel applications from 2007 onwards, andthe recovering profitability of the industrial division leave the Group wellplaced for the future." Notes:(1) The exchange rate used for the above £ sterling equivalents is $1.78 : £1being the rate prevailing at the close of business on 26 January 2006. For further information please contact: Senior plcGraham Menzies, Group Chief Executive 01923 714702Mark Rollins, Group Finance Director 01923 714738 Finsbury GroupAdrian Howard 020 7251 3801 This announcement, together with other information on Senior plc, may be foundat: www.seniorplc.com Note to Editors:Senior is an international manufacturing group with operations in 11 countries.Senior designs, manufactures and markets high technology components and systemsfor the principal original equipment producers in the worldwide aerospace,automotive and specialised industrial markets. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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