Friday, September 24, 2010

McKechnie to Change Hands this Week?

McKechnie Aerospace has three bidders, The Carlyle Group, Precision Castparts and TransDigm Group.  Carlyle is a private equity underwriter (PEU) while the other two firms are aircraft component makers.  It's not clear what happened to Blackstone or GS Capital Partners.  A sale could be announced as soon as next week.

Bloomberg reported:

McKechnie makes fasteners, latches and valves for aircraft, including those built by Boeing Co. and Airbus SAS. The world’s two biggest planemakers are boosting output to records starting next year as airlines recover from the recession and seek newer, more fuel-efficient jets to refresh and expand their fleets. They’re also trying to cut costs and streamline partnerships with vendors as they develop new models.

Carlyle has a history with Boeing via affiliate Vought Aircraft Aviation.  Boeing worked with Vought on the 787 Dreamliner, but the supplier gunked up the production line.  Vought CEO Elmer Doty blamed an "internal liquidity crisis" for problems getting production lines up and running. This was when Carlyle was flush with cash and had millions in grant money from Texas and South Carolina.

Boeing eventually bought out a Vought joint venture and Vought's South Carolina Dreamliner production division.  McKechnie's owners may want to conduct due diligence, but it's Morgan Stanley and JLL, a fellow PEU.  I believe their sole requirement is check that doesn't bounce..

Update:  TransDigm won McKechnie with a $1.27 billion bid.