Tue 04, Dec 2018
Hexcel Corporation on November 30, 2018 announced that it has entered into a definitive agreement to acquire ARC Technologies, Inc., a leading supplier of custom RF / EMI and microwave absorbing composite materials for military, aerospace and industrial applications. The acquisition strengthens Hexcel’s existing advanced materials portfolio in structural composites and thermoplastics and provides new opportunities for growth and market penetration.
It is estimated that the EMI shielding market in aerospace would reach US$ 993.0 million in 2024. The factors supporting the growth are the increasing production rates of key programs including B737, B787, A320, and A350XWB, introduction of composite-rich aircraft, and increasing use of modern electronics equipment.
ARC Technologies which was founded in 1988, is a privately-owned manufacturer with about 170 employees working at two locations in Amesbury, Massachusetts. The company has a wide range of capabilities for producing RF / EMI and microwave absorbing materials and specializes in combining absorptive metallic filler compounds – including carbon, iron and nickel-coated graphite – with a proprietary blend of polymer resins to generate various matrix materials including structural composites and thermoplastics.
Hexcel Chairman, CEO and President Nick Stanage said, “ARC Technologies is a leader in materials science with talented people and a culture that is a strong fit with ours. This acquisition will combine two great research and technology teams to further develop next-generation products for both commercial and military aerospace and defense applications. Both companies are committed to maintaining strong customer relationships focused on innovative solutions so we will be well positioned to grow and enhance the business.”
ARC Technologies Founder & CEO Daniel P. Healey, III said, “This acquisition represents a major step in strengthening our capabilities in RF absorbing materials, thermoplastic products and specialty composites. Hexcel has a well-known industry reputation for producing high-performance structural materials, so the acquisition will improve our ability to offer the next generation of aerospace materials and advanced composites to our customers. Knowing Hexcel’s corporate credibility and culture, I’m confident that the acquisition will benefit both companies and all of our employees.”
It is expected that ARC Technologies would generate a revenue of about $50 million in 2018. The agreed-upon purchase price is $160 million, which represents a multiple of 11.9 times 2018 expected adjusted EBITDA. The transaction is expected to close early in 2019.
News Source: Hexcel Corporation