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Safran Acquires Goodrich Electric Power Systems

Oct. 16, 2012 - 09:53AM   |  
By PIERRE TRAN   |   Comments
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PARIS — Safran has agreed to pay 310 million euros ($401 million) for the electrical power systems business of Goodrich as part of its “all-electric aircraft” strategy, the French aero-engine and equipment maker said Oct. 16.

Safran, in making the announcement of the “definitive agreement,” referred to Goodrich Electric Power Systems (GEPS) as “a leading supplier of on-board aerospace electrical power systems.”

“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,” said Jean-Paul Herteman, Safran chairman and chief executive.

Safran is looking for technology that converts electromechanical gear — such as landing gear and nacelles — into fully electrical systems.

Goodrich Electric Power Systems is expected to have post sales of $200 million in 2012, with about half coming from spares and maintenance, repair and overhaul. GEPS employs some 560 staff, Safran said.

GEPS’ 60 percent stake in the Aerolec joint venture with Thales is included in the deal. Aerolec supplies main electrical power generation for the Airbus A380 superjumbo and A400M military transport. Safran last year signed a deal to supply a global electrical distribution system for the Embraer KC-390 military airlifter.

Announcement of the deal comes one week after a hedge fund, The Children’s Investment Fund, attacked Safran’s capital allocation strategy, notably the acquisition of 1 billion euros’ worth of security businesses, rather than focusing on the aerospace propulsion and equipment area.

The fund, which holds 3 percent of Safran’s share capital, also warned against any move toward a “politically motivated” deal with defense electronics specialist Thales.

The defense industry is in structural decline, revenue growth will be limited and margins will continue to be under pressure as governments implement austerity programs, the fund managers wrote in an Oct. 9 letter to Safran.

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