Proposed Acquisition

MEGGITT PLC

PROPOSED ACQUISITION OF PACIFIC SCIENTIFIC AEROSPACE ("the Acquisition")

Meggitt PLC ("Meggitt" or "the Group"), a leading international engineering group specialising in aerospace, defence and energy markets, is pleased to announce it has agreed to acquire Pacific Scientific Aerospace ("PSA") from Danaher Corporation ("Danaher") for US$685 million in cash (the "Acquisition").

The Acquisition will be funded in part by an equity placing of up to 69.8 million new ordinary shares, representing less than 10 per cent. of Meggitt's current issued share capital; the balance will be funded from existing debt facilities.

PSA is a leading supplier of components to the global civil aerospace and military markets. Organised in six businesses, PSA offers fire suppression, sensing, electric power, electric actuation and security products, with a balanced presence between civil aerospace (57 per cent. of revenues) and military (43 per cent. of revenues) markets.

PSA generated unaudited adjusted operating profit from trading activities before depreciation and amortisation ("EBITDA") of US$79 million and revenues of US$378 million for the year ending 31 December 2010.

Rationale and Highlights of the Transaction

PSA fits well into Meggitt's business model, with strong technology positions, a significant level of sole source content and aftermarket sales representing over one-third of PSA's total revenues. PSA also represents an excellent strategic and complementary fit with the existing Group:

§  The Acquisition adds fire and smoke suppression to Meggitt's product portfolio, creating an integrated leading fire and smoke detection and suppression capability increasingly being demanded by customers

§  PSA's expertise in generators, electric motors, electric controllers, and electric actuators will enhance Meggitt's ability to provide electric systems as aircraft of the future shift away from hydraulic / pneumatic technology towards electric power

§   Additionally, the Acquisition strengthens Meggitt's portfolio of sensors and anti-icing products

§   Meggitt and PSA's complementary products are on a considerable number of common platforms, which will further strengthen the Group's relationship with key customers, who will benefit from the increased service levels, greater procurement scope, wider product range, enhanced global coverage and larger engineering resources

§  The Acquisition will increase Meggitt's shipset values on major civil and military platforms, including key growth platforms such as the Boeing 787, Airbus A380, A350 and A400M and Eurocopter NH-90

§   The Acquisition will also enhance Meggitt's low cost manufacturing capability, with the addition of factories in Mexico and Vietnam

Financial Effects of the Transaction

§  The Acquisition is expected to be earnings enhancing immediately

§   The Acquisition price represents 8.7 times 2010 actual EBITDA (including the estimated value of cash tax benefit, the Acquisition price represents 7.9 times 2010 actual EBITDA)

§  Estimated cost synergies of approximately US$5 million are expected in 2011, rising to around US$18 million per annum by 2014. The one-off cost to achieve these savings are expected to be approximately US$32 million spread over three years

§   The Acquisition is expected to generate significant cash tax benefits of up to US$8 million per annum for 15 years, or approximately US$117 million in aggregate

§  Meggitt's gearing, post Acquisition, will be comfortably within existing debt covenants. Pro-forma net debt to EBITDA is estimated to be approximately 2.5 times as of 30 June 2011 and approximately 2.0 times as of 31 December 2011

Commenting on the proposed Acquisition, Terry Twigger, Chief Executive of Meggitt, stated:

"We are delighted to announce the acquisition of PSA today as it represents a further major step in the strategic growth and development of the Meggitt Group and fits well into Meggitt's business model, with strong technology positions, a significant level of sole source content and aftermarket sales representing over one-third of PSA's total revenues.

The acquisition adds fire and smoke suppression capabilities to Meggitt's product portfolio, creating an integrated leading fire and smoke detection and suppression offering, it increases Meggitt's shipset values on major civil and military platforms (including key growth platforms such as the Boeing 787, Airbus A380, A350 and A400M and Eurocopter NH-90), and will enhance Meggitt's offering of electric aircraft solutions as aircraft of the future shift away from hydraulic / pneumatic technology towards electric power.

We look forward to welcoming PSA employees into our organisation, which will provide a focused aerospace and defence growth platform for PSA."

The Acquisition is conditional on regulatory clearances including CFIUS and anti-trust, and other customary conditions. The Acquisition includes a binding offer to acquire Artus, the French part of the business, which will remain open to acceptance for a period of 12 months.

The Acquisition is expected to complete by the end of April 2011.

Meggitt will announce its preliminary results for 2010 on 1 March 2011. In line with Meggitt's 4 November Interim Management Statement, the Group continues to trade in line with the Board's expectations.

Meggitt has received financial advice from Rothschild in relation to the Acquisition. BofA Merrill Lynch is acting as corporate broker for the Company.

A copy of the management presentation on the Acquisition will be made available on Meggitt's website (www.meggitt.com) today.

For further information please contact:

Notes to editors

About PSA

PSA is a leading supplier of safety, security and electric power components to the global commercial and military aerospace markets. Serving customers from locations across North America, Europe and Asia, PSA's six divisions employ approximately 2,100 members of staff.

·; Artus: headquartered in Avrillé, France, manufactures electric motors, position sensors, electro-mechanical actuators, electric power generation and conversion systems and dedicated high power servo drives

·; HTL/Kin-Tech: headquartered in Duarte, CA, USA, is a world-class manufacturer of aircraft safety products, including fire extinguishers, personnel safety restraints, mechanical and electro-mechanical subsystems, high pressure vessels, valves and gauges

·; OECO: headquartered in Milwaukie, OR, USA, focuses on custom design, manufacturing, and environmental testing of power generation, power conversion and magnetic components for commercial and military aerospace and land vehicle markets

·; Securaplane: headquartered in Tucson, AZ, USA, is a leading supplier of emergency and main ship batteries, battery chargers and inverters, airborne video and security systems and wireless system integration

·; Sunbank: headquartered in Paso Robles, CA, USA, is a leading designer and manufacturer of electrical cable accessories, connectors and flexible conduit systems for high-reliability commercial and military applications

·; Thomson Aerospace & Defense: headquartered in Saginaw, MI, USA, designs and manufactures ball screws and related electromechanical systems for commercial and military aircraft, land vehicle and naval systems, and MRO applications

PSA's gross assets as of 31 December 2009 were US$428 million and profit before tax was US$71 million.

About Meggitt

Meggitt PLC is a leading international engineering group specialising in aerospace, defence and energy markets with a consistent record of strong financial performance. Meggitt's goal is to increase and strengthen its presence in long term growth markets through proprietary product development reinforced by strategic acquisitions and investment in people and facilities. Meggitt's well-balanced portfolio offsets variation in demand from the market niches within which it operates.

Other Information

The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the US Securities Act.

Any adviser to Meggitt PLC is acting solely for Meggitt PLC in connection with the proposals and no one else and will not be responsible to anyone other than Meggitt PLC for providing the protections afforded to the respective clients of such adviser or for providing advice in relation to the proposals or any transaction or arrangement referred to in this announcement.

The estimated operational cost savings and financial synergies have been calculated on the basis of the existing cost and operating structures of Meggitt and PSA and by reference to current prices and the current regulatory environment. These statements of estimated cost savings and one-off costs relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. Because of this, the cost savings and financial synergies referred to may not be achieved, or those achieved could be materially different from those estimated.

Nothing in this announcement is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Meggitt share for the current or future financial years, or those of the enlarged group, will necessarily match or exceed the historical published earnings per Meggitt share.

Forward-looking statements

This announcement contains (or may contain) certain forward-looking statements with respect to certain of Meggitt PLC's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. Meggitt PLC cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'aim', 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe', or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding Meggitt PLC's results of operations, future financial position, income growth, impairment charges, liquidity, business strategy and the industries in which Meggitt PLC operates, projected costs, estimates of capital expenditure, and plans, dividend growth and objectives for future operations of Meggitt PLC and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, Meggitt PLC's ability successfully to combine the business of the Meggitt PLC group and PSA and to realise expected synergies from that combination; UK domestic and global economic and market conditions, the market position of the Meggitt PLC group, earnings, financial position, cash flows, return on capital and operating margins of the Meggitt PLC group, changing business or other market conditions, the success of future acquisitions and other strategic transactions and the impact of competition - a number of which factors are beyond Meggitt PLC's control, and general economic conditions. As a result, Meggitt PLC's actual future results may differ materially from the plans, goals, and expectations set forth in Meggitt PLC's forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of Meggitt PLC speak only as of the date they are made. Except as required by the Financial Services Authority, The London Stock Exchange plc or applicable law, Meggitt PLC expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in Meggitt PLC's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Important information

This announcement is for information only and shall not constitute an offer to sell or a solicitation of offers to purchase or subscribe for any securities, nor shall there be any sale or purchase of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The distribution of this announcement to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements. 

Neither the content of Meggitt's website nor any website accessible by hyperlinks on Meggitt's website is incorporated in, or forms part of, this announcement.