The Boeing Company (BA) has entered into an agreement to acquire Helena, Montana based metal structure supplier Summit Aeronautics Group. The addition of Summit Aeronautics would bolster the company’s production capacity of titanium and other hard metal structures. The acquisition is expected to close in the fourth quarter of 2010.
Summit Aeronautics Group has a long association with Boeing of providing hard metal machining for Boeing’s different models of aircraft. Summit Aeronautics supplied 747-8 failsafe bars, which allow the flaps to move on the wings; the edge frames of 787 that fit around the doors; and 767 main-landing-gear beams, which assist in landing gear rotation.
Summit Aeronautics will continue to work on the existing programs and other metal parts for 787 following the completion of the merger. As per the agreement, Boeing will acquire the building, assets and inventory as well as assume operation of the Summit Aeronautics site. Once acquired, this group will become a part of Boeing Fabrication.
Boeing Fabrication is a wing of the Commercial Airplane segment of the company. At the end of third-quarter 2010 the contractual backlog from the Commercial Airplane segment was 3,401 airplanes. We believe this acquisition will ensure supply of hard materials required to complete aircraft production.
Boeing is making strategic acquisitions not only on the commercial side of the business but also to reinforce its defense operations. Recently, Boeing acquired California based software engineering company, CDM Technologies, to strengthen its logistics command and control business.
The Summit Aeronautics acquisition is not likely to materially impact Boeing’s bottom line in 2010 and 2011. The Zacks Consensus Estimates for fourth quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are a respective $1.11, $3.99 and $4.69 per share.
Based in Chicago, The Boeing Company designs and produces commercial airplanes, defense systems and civil and defense space systems. The major competitors of the company are General Dynamics Corp. (GD), Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).
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