ST Engineering completes US acquisition for US$506m

Singapore

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

ST Engineering's US subsidiary Vision Technologies Aerospace Incorporated bought a 100 per cent stake in Maryland-based engine nacelle systems manufacturer MRA Systems from the United States' General Electric, making MRA Systems 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 final price took into account post-completion adjustments for debt-like items and working capital.

In September 2018, the company had estimated the amount to be US$440 million after closing adjustments based on an aggregate purchase consideration of US$630 million, before closing adjustments.

The deal is expected to be earnings-accretive for ST Engineering.

The group also said the acquisition would scale up its aerospace capabilities in the US by moving it into the business of the original equipment manufacture of high-value nacelle parts, in a hunt for new growth areas to invest in.

Shares of the company, which is 51 per cent-owned by Singapore investment firm Temasek Holdings, closed at S$3.87 on Thursday, up one cent.