GKN plc has agreed to acquire Fokker Technologies Group B.V. from Arle Capital for an enterprise value of €706 million (£499 million).
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Fokker is a specialist tier one aerospace supplier in aerostructures, electrical wiring systems, landing gear and associated services, across commercial, military and business jet end markets. Its headquarters are in the Netherlands.
Fokker has four divisions: aerostructures, electrical systems, landing gear and services.
Fokker is well positioned on attractive programmes including Airbus (A320/350/380), Lockheed Martin (F- 35), Boeing (B737/777), Bombardier (C Series), Gulfstream (G650), United Technologies (GTF engine), Rolls-Royce (Trent 500/1000/XWB engine) and NH Industries (NH90), many of which are sole source and have life of programme contracts. The positions on F-35 and A350 offer attractive growth prospects with build rates expected to increase significantly in the short to medium term.
Fokker has a stable base of orders, with the majority of the value of its orderbook coming from four programmes: F-35, A350, G650 and NH90 European helicopter. During the year ended December 31, 2014, Fokker reports that it generated 30% of its revenue in military end markets and 20% in business jets. The addition of Fokker to GKN Aerospace will strengthen GKN’s position in both of these.
Fokker is a leader in advanced composites including thermoplastics and GLARE (glass-reinforced aluminium laminates) that will complement GKN’s own composite leadership capability. Fokker also has strong electrical wiring technology, based on proprietary systems, which adds a new technology field to GKN Aerospace.
For the year ended December 31, 2014, Fokker reported revenue of €758 million, EBITDA of €76 million and operational EBIT of €53 million. Fokker had total assets of €814 million.
GKN estimates that it can generate operational improvements similar to those achieved in previous acquisitions and has identified potential cost savings and efficiencies equivalent to 3% of sales by 2018.
It is expected that the transaction and integration costs will be approximately €50 million (£35 million) during 2015 and 2016.
Anticipated revenue growth from 2017 is expected to assist the improvement in the overall Fokker margin, particularly in the higher margin aerostructures division. In addition, Fokker has historical tax losses which GKN expects to utilise going forward. ■