Precision CastParts produces a great variety of aerospace components, including subassemblies for jet engines. Pictured above: A GE Aviation LEAP engine.
Precision Castparts’ latest acquisitions reveal a widening materials strategy
August 2015 - In the last month, Precision Castparts Corp. has agreed to acquire two companies. The larger one is Noranco, maker of complex machined and fabricated components for aero-engine, landing gear and airframe applications. Noranco also performs processing, assembly and testing for aircraft builders and their tier one suppliers.
“By utilizing our current operations to supply forgings and fasteners to Noranco, PCC becomes an even more competitive force among aerospace manufacturers,” Chairman and CEO Mark Donegan said in a recent earnings call with investors.
(Investors are probably jumping for joy as the board of directors on Aug. 10 approved the proposed acquisition of PCC by Warren Buffet-led Berkshire Hathaway for $37 billion, or $235 per share, cash.)
Perhaps the more telling acquisition, however, was that of Composites Horizons LLC (CHI), which produces high-temperature carbon and ceramic composite components, including ceramic matrix composites (CMC), for use in next-generation aerospace engines.
“Driven by their temperature and weight capabilities, the demand for composite and CMC components in aircraft engines is expected to expand over the next decade,” according to Donegan. “In combination with CHI, PCC is now able to offer our engine customers a range of metallic and CMC material capability to meet any requirement.”
Discussing the acquisitions during PCC’s quarterly earnings call July 28, Donegan disclosed that the company has been focused on trying to add composites to its portfolio for a couple years.
“We continue to look for solutions ... to provide for our customer. I don’t care if that’s shapes or capabilities; in this case it’s moving beyond metallics. We want to provide the answer.”
Next-generation jet engines are increasingly being specified with composite components as engine manufacturers—aiming for higher operating temperatures —seek out “more complex flow shapes. You can get a lot more configuration in a composite than you can a metallic and they’re always searching for higher strength-to-weight ratios,” Donegan says.
CHI already has “good content on the next generation commercial programs,” he says.
One of CHI’s strengths is its ability to replace a component made of sheet metal with a “component that’s got a lot more heat capability but also gives a shape that we typically can’t get out of a casting.”
Donegan views the tuck-in acquisition “as an expansion of our structural components businesses, be it titanium or nickel,” primarily for engine applications.
