Safran enters into a definitive agreement for the purchase of Goodrich Electric Power Systems

Safran (NYSE Euronext Paris: SAF) announced today that it has entered into a definitive agreement with Goodrich Corporation, a subsidiary of United Technologies, to acquire the electrical power systems activities of Goodrich (Goodrich Electric Power Systems - GEPS), a leading supplier of on-board aerospace electrical power systems.

These activities are expected to generate revenues of over USD 200 million in 2012, of which the aftermarket business (spares and MRO services) should contribute half. GEPS employs approximately 560 people, primarily at its headquarters and facility in Pitstone Green (c. 460 people), UK, and at a facility in Twinsburg (c. 100 people), OH, USA.

Strategic rationale

The transaction, by combining GEPS and Safran’s complementary strengths, gives birth to a world leader in aerospace electrical power systems with a comprehensive product portfolio. GEPS brings new capabilities to Safran’s product offering, including the critical electrical power generation know-how and experience which is the heart of electrical power systems. One year after the first gain by Safran of a global electrical distribution system on the Embraer KC390, the acquisition of GEPS brings to Safran key additional capabilities in electrical technologies. Thanks to the combination of electrical power generation and distribution capabilities thus acquired, Safran achieves a decisive breakthrough in its “all electrical aircraft” strategic roadmap.

The acquisition will also allow Safran to continue to develop new leading-edge solutions for the electrification of aircraft equipment (including landing gear, nacelle and equipment linked to power transmissions) and closer integration of electrical systems with the aircraft engine.

Safran will combine its R&D heritage and expertise in electrical wiring components (Labinal) and power electronics (Safran Power) as well as its innovative electrically powered equipments (Messier-Bugatti-Dowty’s brakes, Aircelle’s thrust reverser) with the GEPS business to produce world-class electrically powered systems.

Safran’s electrical power systems activities will benefit from GEPS sustained revenues derived from a strong installed base on all types of aircraft including commercial (large and regional), business jets, helicopters and military (including A380, A320ceo, A320neo, Embraer ERJ145 family, Dassault Falcon 7X and Bombardier GX) and associated growing aftermarket revenues.

Thanks to GEPS’s longstanding customer relationships, Safran will enjoy growth on existing and new platforms. The company’s advanced technology roadmap, which includes for example the development of starter-generator technologies and high-power Variable Frequency generation, provides a superior platform for future wins.

Jean-Paul Herteman, Safran Chairman and CEO, declared : “This transaction represents a decisive step in the implementation of Safran’s strategy to be a global leader in the field of aircraft electrical systems. The trend towards More Electrical Aircraft is a long term irreversible industry evolution which opens up new opportunities for our industry. This is a targeted acquisition ideally complementary with our current electrical assets (Labinal, Safran Power) and fully in line with our strategy of development based on technological differentiation. It will provide R&D savings versus internal development, and key customer access based on recognized expertise and excellence.”

Source: Safran S.A. (Paris: SAF.PA)
Date: Oct 16, 2012