ST Engineering's $868m buy could boost aerospace capabilities

The MRA Systems is also synergistic with STE’s composite manufacturing capabilities.

The $868m acquisition of the 100% of GE’s MRA Systems (MRAS) by ST Engineering could scale up its aerospace capabilities by moving it into the original equipment manufacturer (OEM) business of high-value nacelle components and replacement parts, OCBC Investment Research (OIR) said.

“MRAS’ design, engineering and manufacturing know-how in advanced composite structures is also synergistic with STE’s composite manufacturing capabilities,” OIR explained.

With this, OIR thinks that the acquisition will reap benefits for ST Engineering in the long term, besides being earnings accretive.

The base purchase price of the deal translates to a multiple of 10 times MRA’s EBITDA and 1.2 times MRAS’ revenue for the 12-month period ended 30 June 2018.

Based in Baltimore, Maryland, USA with approximately 800 employees, MRAS has two principal business lines: design, development, production and sale of nacelles, thrust reversers and aerostructures; and spare parts sales.