It would seem that Meggitt's appetite for expansion knows no bounds. As another major airshow hoves into view, Meggitt will be displaying a host of new product ranges thanks to the recent acquisitions. These include Meggitt Western Design (formerly Western Design Howden), Meggitt Airdynamics (formerly Howden Airdynamics) and the design and manufacturing division of the Dunlop Standard Aerospace Group—a cash deal announced only on July 5.
"Consolidation is going on all round us," explains Meggitt CEO Terry Twigger, "and customers want to deal with larger suppliers who have the resources and complementary lines that deliver ‘scale' to their product offerings. We are growing organically and through appropriate acquisitions. That strategy is pretty focussed on aerospace, defense and sensing systems."
Meggitt, says Twigger, has a balanced portfolio across civil and military markets with about 60% of its overall business coming from OEM sales and the rest from the aftermarket area. He expresses particular interest in building on Meggitt's current expertise in conditioning sensing and trend monitoring, electro-mechanical engineering and polymer components.
The depth of skills the company has across its four business units—Aerospace Systems, Aerospace Equipment, Defence Systems and Electronics—is not always apparent to those who know the company best for its work with aerial target systems and drones. In that realm, Meggitt has just announced the production launch for 12 Voodoo high-speed target-towing drones for an unnamed customer (Taiwan has been most closely associated with this program).
Meggitt's attention is now turning more and more to the United States. One reason is that "the U.S. market for companies is so much ‘freer' and acquisitions are more straightforward there," says Twigger. "Meggitt is a UK-controlled company that nevertheless does most of its business in Europe and the U.S."
Asked how much of an issue company ownership should be for customers and governments alike, Twigger replies, "Given that 75% of our operations are located abroad its difficult to claim that ownership is not an issue—although I would like to see more emphasis placed [by customers] on the quality of jobs delivered and the skill base maintained."
With regard to the UK's open-door policy on ownership, he notes that BAE Systems' acquisition of the British vehicle manufacturer Alvis, which halted a takeover bid by General Dynamics, may represent a turning point for UK industry.
As his company continues to climb the industry league tables, is there a risk that Meggitt itself might soon be big enough to attract suitors of its own?
"When you're a company like us in a market this size the answer is yes," says Twigger. "Meggitt is already a potential acquisition target for larger companies. That doesn't bother us—we manage the assets we own and deliver good deals for our customers and shareholders. Now, if anyone thought they could do better, then we'd be open to offers. Fundamentally, we are a public company."
Meggitt is in Hall 3, Stand B7, Chalet C13-14 and OE4.
