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October 2018

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ST Engineering has announced that its US subsidiary, Vision Technologies Aerospace (VT Aerospace), has entered into a conditional share purchase agreement to acquire a 100% ownership in MRA Systems (MRAS) from General Electric. The aggregate purchase consideration for the Proposed Acquisition is $630 million on a cash-free and debt-free basis, subject to closing adjustments for underfunded pension obligations, other debt-like items, transaction expenses, net working capital and other contingent adjustments. MRAS is an established OEM of engine nacelle systems for both narrowbody and widebody aircraft. Based in Baltimore, MD, with approximately 800 employees, MRAS has two principal business lines: design, development, production and sale of nacelles, thrust reversers and aerostructures; and spare parts sales.
 
ST Engineering has been looking to invest in new growth areas, including businesses that offer competitive products through the ownership of intellectual properties and that are synergistic to its core businesses. MRAS is a strong fit given its expertise and proprietary designs to manufacture nacelles using advanced composites. MRAS’ design, engineering and manufacturing know-how in advanced composite structures is synergistic with ST Engineering’s composite manufacturing capabilities.
 
MRAS has a good combination of mature and next-generation nacelle programmes, all of which are single-source contracts. MRAS’ next-generation programmes include the Airbus A320neo powered by CFM International’s LEAP-1A engine. In partnership with Safran Nacelles, which was awarded the single-source contract by Airbus for A320neo’s LEAP-1A engine nacelles in 2012, MRAS has delivered over 500 LEAP-1A units so far. There are more than 6,000 A320neo aircraft ordered to-date. Over half have selected the engine type,  of which 60% have selected to be equipped with CFM International’s LEAP-1A engine. Other single-source programmes in the MRAS portfolio include the COMAC C919 powered by CFM International’s LEAP-1C turbofan engine, and ARJ21, powered by General Electric’s CF34 engine. There are more than 1,200 COMAC’s C919 and ARJ21 aircraft on order to-date according to industry reports. MRAS also provides nacelles for Bombardier’s Global 7000/8000 series of next-generation private/business jets.
 
The company notes that the components MRO market is attractive, as it is expected to be worth an estimated $2.4 billion by 2025. It adds that synergies can be created with ST Engineering’s MRO capabilities and global network, and by building more shop level repaircapacity and growing the on-wing support network.

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