Goodrich Acquires DeCrane Assets - Analyst Blog

Defense contractor Goodrich Corporation (GR) has concluded the acquisition of the Cabin Management assets of DeCrane Holdings Company for approximately $280 million. Inclusion of DeCrane’s Cabin Management assets will boost the capacity of Goodrich’s Interiors Strategic Business Unit, within its Nacelles and Interior Systems Segment. DeCrane’s Cabin Management business unit provides seating, furniture, veneers and cabin management systems to the business jet market.

DeCrane Cabin Management employs approximately 850 people at six facilities in the U.S. Major customers include business jet manufacturers such as Canadian conglomerate – Bombardier Inc., Textron Inc. (TXT), French jet maker –Groupe Industriel Marcel Dassault S.A., and General Dynamics Corporation (GD). Primary products include aircraft seats, molded composites, custom-made cabinets, custom veneers and furniture, cabin management systems and in-flight entertainment systems.

Based in Charlotte, North Carolina, Goodrich supplies components, systems and services to the commercial and general aviation airplane markets. The company also supplies systems and products to the global defense and space markets. Businesses include manufacturing, service and sales, which are carried out in locations throughout the world.

Goodrich’s products and services are sold in North America, Europe and Asia. Goodrich operates three business segments – Actuation and Landing Systems, Nacelles and Interior Systems and Electronic Systems.

Goodrich Corporation’s geographically diverse customer mix, strong balance sheet, incremental dividend-paying history, an ongoing share repurchase program and a relatively cheap earnings-based valuation support our bullish outlook for the company.

However, this is offset by the depressed fortunes of the business jet market, high research and development overheads, and regulatory risks. We currently have a market Neutral recommendation on the Zacks #3 Rank (‘hold’) Goodrich stock.