LOS ANGELES Precision Castparts Corp. (PCC) could spend another $4 billion to $6 billion on acquisitions during the next three years, chairman and chief executive officer Mark Donegan said.
Portland, Ore.-based PCC could deploy this amount between "now and fiscal year 2017," which begins on April 1, 2016, Donegan said during a conference call on its fiscal first-quarter financial results.
PCCs most prominent acquisitions recently include its $2.9-billion buy of Exton, Pa.-based Titanium Metals Corp. (Timet) in late 2012 (amm.com, Nov. 9, 2012) and this years purchase of Aerospace Dynamics International Inc. (ADI), a Valencia, Calif.-based machining house, for $625 million (amm.com, March 20).
PCC has been one of the aerospace supply chains most active acquirers, even before the recent consolidation wave that began more than a year ago and included Pittsburgh-based Alcoa Inc.s recent announcement that it would acquire engine forgings producer Firth Rixon Inc. for $2.85 billion (amm.com, June 26).
Moreover, Donegan emphasized that PCCs acquisition efforts over the years havent merely targeted low-hanging fruit, since most of the properties it has purchased were, in fact, originally "not for sale." The company is "constantly" engaged in some manner of talks, he said, citing a five-year negotiation period for Timet and three years for Paramount, Calif., aerospace forgings supplier Carlton Forge Works (amm.com, Aug. 27, 2009). The average time it takes to work on an acquisition is 1.5 to two years, he said.
While PCCs largest interests have traditionally been in investment castings, forgings and fasteners, during the past two years it has expanded its involvement in aerostructures and machining. This was typified by this years acquisition of ADI; the 2012 purchase of Centra Industries Inc., Cambridge, Ontario; and Bellevue, Wash.-based Primus International Inc., among others.
PCC posted net income of $483 million for the fiscal first quarter ended June 30, up 10.8 percent from $436 million a year earlier, sales that increased 6.8 percent to $2.53 billion from $2.37 billion.
By market, 69 percent of PCCs quarterly sales were in aerospace, 18 percent in power and 13 percent in general industrial and other markets, the company said.