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HEICO (HEI) Buys Flight Microwave, Taps Wider Defense Space

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HEICO Corporation HEI announced that its unit Lucix has acquired 100% of the stock of Flight Microwave Corp. in an all-cash deal. This acquisition has expanded HEICO’s defense market operation. Flight Microwave designs and manufactures custom high-power filters and filter assemblies used in space and defense applications.

HEICO expects that this acquisition will be accretive to earnings in the year following the purchase. Flight Microwave will operate within Lucix, which is part of HEICO's Electronic Technologies Group.

HEICO Expanding Operations via Acquisitions

HEICO’s organic growth is adequately supplemented by its systematic acquisition strategy. During fiscal 2021, HEICO successfully completed six acquisitions.

During fiscal first-quarter 2022, HEI acquired 100% of Paciwave, which is a specialized designer and manufacturer of radio frequency and microwave components and integrated assemblies, with its customers including defense contractors and electronics manufacturers both within and outside the United States. These acquisitions continue to expand Heico Corp.’s product portfolio and widen its defense customer base.

M&A in Defense Space

The Aerospace Defense industry players continue to expand their product lines through small and medium-sized mergers and acquisitions.

Last year, Raytheon Technologies Corp. RTX completed the acquisition of SEAKR Engineering, a supplier of advanced space electronics. The transaction is expected to boost Raytheon’s Space business opportunities. This deal adds to Raytheon’s previous FlightAware buyout, which strengthened RTX’s footprint in the flight data monitoring market.

The Zacks Consensus Estimate for Raytheon’s 2022 and 2023 earnings per share indicates 12.2% and 20.4% year-over-year growth, respectively.

Price Performance

Shares of HEICO have rallied 8.6% in the past year compared with the industry’s 8.4% growth.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank & Key Pick

HEICO currently has a Zacks Rank #3 (Hold). A better-ranked stock from the same industry is BAE Systems plc BAESY, each having a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for BAE’s 2022 and 2023 earnings per share implies 22.3% and 8.3% year-over-year growth, respectively. The long-term (three to five years) earnings growth of BAESY is currently projected at 5.3%.


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