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ST Engineering buys US aircraft part maker for US$506m

DEFENCE contractor Singapore Technologies Engineering on Thursday completed its acquisition of an aircraft part maker for a net consideration of US$506 million (S$683 million) in cash.

Its US subsidiary Vision Technologies Aerospace Incorporated bought Maryland-based engine nacelle systems manufacturer MRA Systems, making the latter an indirect wholly owned subsidiary of ST Engineering. An engine nacelle is the casing that houses an aircraft engine, providing efficient aerodynamics during flight and thrust reversal capabilities.

The net consideration amount is subject to post-completion adjustments for debt-like items and working capital.

In an earlier announcement on Sept 13, 2018, the amount had been estimated to be at US$440 million after closing adjustments based on an aggregate purchase consideration of US$630 million before closing adjustments.

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ST Engineering had previously said that the acquisition would scale up its aerospace capabilities in the US by moving it into the original equipment manufacture of high-value nacelle parts, in a hunt for new growth areas to invest in.

The company, which is 51 per cent-owned by national investment firm Temasek Holdings, will conduct its annual general meeting on Thursday afternoon.

ST Engineering's Mainboard-listed shares closed at $3.86 on Wednesday, up one Singapore cent.