LOS ANGELES Precision
Castparts Corp. (PCC) isnt at the end of its acquisition
string, but another purchase on the scale of its pending
blockbuster takeover of Titanium Metals Corp. (Timet) may not
be in the cards anytime soon, PCCs top executive
"Are we at the end of ideas? No,
were not by any stretch of the imagination," PCCs
chairman and chief executive officer Mark Donegan said at the
Credit Suisse 2012 Aerospace and Defense Conference in New York
last week when asked about the possibility of additional
acquisitions in the near future.
In what Donegan described as a
"needle-mover" for PCC, the Portland, Ore.-based producer of
castings, forgings, fasteners and aerostructure components said
in November it would pay $2.9 billion for Timet. PCC followed
the news last week with its intention to acquire Synchronous
Aerospace Group, a Santa Ana, Calif.-based aerospace machining
and manufacturing company (
amm.com, Nov. 28).
While PCC didnt disclose
how much it will pay for Synchronouswhose owner listed
its annual sales at $130 millionthe price is thought to
dwarf that of Dallas-based Timet, whose 2011 revenues were more
than $1 billion.
Donegan cited some "interesting
dynamics" in play until the end of the year that have
influenced the current pro-acquisition environment. "There is a
reason why youve seen so much" takeover activity in the
last six months and may see more for the balance of 2012, he
said at the conference.
Donegan didnt go into
further detail on these "dynamics," and a PCC spokesman
couldnt be reached for comment. But many say he was
likely referring to the increasing likelihood following last
months re-election of President Barack Obama that capital
gains taxes will go up with the New Year.
sourcesnoting that the Nov. 9 announcement of the
proposed Timet acquisition came just three days after the
national electionsay they believe this helped convince
Harold C. Simmons, the billionaire investor who controls Timet,
to go against his reputation for not divesting his holdings and
instead sell the titanium producer. The sale is expected to be
finalized by the end of the year.
Nevertheless, Donegan emphasized
that PCCwhose business model is known for strict
reporting procedures and a relentless effort to attack
costshas a team in place that could tackle still more
acquisitions soon, although such acquisitions probably
wouldnt be as large as Timet.
"If something comes up
thats a must-have, I think were OK," he said. "Do I
think well get another needle-mover in the next 22 days?
For example, he said, in
PCCs traditional businesses such as castings and
fasteners, the company "could take on more tomorrow morning and
the management team can handle it."
Donegan said that Steven G. Hackett, PCCs senior vice
president of new business integration, has been the point man
for integrating acquisitions into the parent company and will
oversee the assimilation of Timet. He pointed out that Hackett
played the same role after PCCs $850-million acquisition
of Carlton Forge Works, a Paramount, Calif.-based producer of
aerospace forgings that it bought in 2009 and is believed to be
among Timets customers (
amm.com, Aug. 27, 2009), as well as SPS
Technologies Inc., a Jenkintown, Pa.-based fastener
manufacturer that PCC acquired in 2003 for about $730 million
amm.com, Aug. 19, 2003).