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Curtiss-Wright (CW) to Buy Safran Aerosystems' Arm for $240M

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Curtiss-Wright Corporation CW recently revealed that it has clinched an agreement to acquire assets comprising Safran Aerosystems Arresting Company (SAA) in a bid to expand in the military aircraft emergency arresting systems arena. SAA is a subsidiary of Safran Aerosystems.

SAA, a designer and manufacturer of aircraft emergency arresting systems, will function under Curtiss-Wright's Naval & Power segment after the acquisition. Subject to regulatory approval and other closing conditions, the acquisition is expected to conclude in the third quarter of 2022.

Benefits of the Acquisition

In an endeavor to boost its growth prospects and expand its product portfolio, Curtiss-Wright announced the strategic acquisition of SAA. Valued at $240 million, the acquisition is anticipated to be profitable for CW’s earnings post the transaction. Also, it is expected to generate a strong free cash flow conversion rate of more than 100% for the company indicating a strong liquidity position going forward.

Additionally, SAA’s advanced technologies and expertise in manufacturing aircraft emergency arresting systems will aid in enhancing Curtiss Wright’s existing helicopter landing and recovery systems, thus amplifying its order inflow prospects for its enhanced products.

Moreover, the acquisition provides an opportunity for Curtiss Wright for becoming a leading global supplier of fixed-wing aircraft recovery and arresting systems. Underpinned by SAA’s global presence, CW aims at strengthening its global defense portfolio, thus bolstering its revenues from foreign military sales as well.

The move is in sync with its strategy to grow its business and boost its top line through mergers and acquisitions. The aforementioned acquisition provides a competitive edge to the company in the defense market and bolsters its revenues.

Peer Moves

Acquisitions are made by companies to grow their business opportunities by entering into new product lines, increasing market share and also expanding their geographical footprint. In this context, other defense companies alike Curtiss-Wright that have deployed their capital in acquisitions are:

In December 2020, Lockheed Martin LMT announced that it has entered into an agreement to acquire Aerojet Rocketdyne Holdings AJRD for $56 per share in cash. The transaction is subject to regulatory approval.

Aerojet Rocketdyne is a world-recognized aerospace and defense rocket engine manufacturer. AJRD has deep customer relationships and significant demand for its innovative technologies.

The proposed acquisition adds substantial expertise in propulsion to Lockheed Martin's portfolio. LMT’s shares have rallied 5% since the acquisition was announced.

In January 2021,Teledyne Technologies TDY announced the acquisition of FLIR Systems, a world-leading industrial technology company focused on intelligent sensing solutions for defense and industrial applications, in a cash and stock transaction valued at approximately $8.0 billion. In May 2021, Teledyne completed the acquisition successfully

Teledyne boasts a long-term earnings growth rate of 18.1%. The Zacks Consensus Estimate for TDY’s 2022 earnings suggets an improvement of 2.5% in the past 90 days.


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