Dowty Aerospace Is to Disclose Role as Perferred Thrust Reverser Vendor

Smiths Industries Plc, a UK aerospace and engineering company, will buy TI Group Plc and its Dowty subsidiary for $2.72 billion in stock, to expand its aerospace parts business. Smiths shareholders will own 57.6 percent of the new company, and TI shareholders will get 42.4 percent, the companies said. The combined company will have sales of $4.5 billion. The purchase comes as aerospace parts makers are combining to reduce prices and as TI struggles to reverse a sinking share price. The companies said the acquisition, announced Sept. 18, is expected to generate savings of $187 million in the first year. TI said said recently that it wants to sell its automotive unit, estimated by analysts to be worth at least $1.8 billion. That sale will proceed and the unit won't be part of the Smiths acquisition.

Dowty Aerospace is to become a 'preferred supplier' of thrust reverser actuation systems to a U.S.-based aerospace company and hopes to make it official during this convention.

The company, which is part of the UK's TI Group, is already a 'preferred supplier' to France's Hurel-Dubois, which claims to be the world's leading manufacturer of aircraft nacelle systems. The French company has been selected to provide equipment for four important new aircraft projects, and Dowty has won contracts to supply the thrust reverser actuation systems for all of them-representing new business worth $200 million for the British company.

The aircraft are the new short-body Airbus A318, a 107-117-seater which may well have a future as a corporate jet and is powered by Pratt & Whitney engines; the 70-seat Fairchild Aerospace 728JET and Embraer ERJ-170, both GE-powered, and the Bombardier Continental, equipped with Honeywell (Allied Signal) engines.

Dowty Communications Director Tim Davis told Show News, "Five per cent of Dowty's annual turnover of $852 million is in the business aircraft sector, and the company is focusing hard during the convention to improve its stake in this market."

Davis said that the company is aware that it could grow the 'Dowty content' on business aircraft. While the value of bizjet business is smaller than that for systems on airliners, the booming market in corporate aircraft sales creates more opportunities, he said.

Davis said, "The company already has equipment on Bombardier's Challenger 604, Global Express, Learjet 45 and the yet to fly Continental, but we also supply equipment to Cessna for the Citation X, to Gulfstream for the GV and we are on all Raytheon aircraft up to the Premier I." Dowty's Hamble, UK plant still produces the horizontal stabilizer, rudder, tailcone and fuselage components for the Raytheon Hawker 800XP.

Sino Swearingen's SJ30-2, the conforming prototype of which was recently rolled out, is the latest aircraft to have the company's systems aboard, featuring Dowty-built nacelles and engine intake assemblies

Talking about risk-sharing aircraft programs, Davis inferred that they were not always as attractive as they seemed. "Dowty Aerospace is not looking for the 'scatter gun approach' but has recognized that there are new opportunities in the business aviation sector. We are focused and increasing our profile accordingly," he told Show News.

The acquisition from GE of Indiana-based Tri-Industries has doubled Dowty's size and is producing an annual growth of 12%. Tri-Industries has extended Dowty's jet engine capabilities into hot-section components, and makes manifolds, nozzles and sidewalls for the next-generation military programs, the F-22 Raptor and the Joint Strike Fighter (JSF).

Dowty's product and service range includes hydraulic and actuation systems, turbine engine components, aircraft structures, advanced propellers and tubular systems. Other business areas include cockpit canopies, helicopter landing aids, ground support equipment, suspension systems, universal joints, vacuum furnaces and space products.

Dowty engine and airframe hydraulic and actuation systems are employed in all current Airbus and Boeing programs. Its North American and European sales are evenly balanced, as are its main product areas-40% engine related, 45% airframe.

Dowty has its largest booth ever at this year's NBAA, complete with one of its thrust reverser actuator systems and a large skeletal business jet to show off the company's many products. "We aim to show the extent of our capability to world business aircraft manufacturers," said Tim Davis, disclosing that, "During the convention, customers permitting, we hope to make other significant announcements."

By Mike Vines