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Aequs, a Belagavi-based aerospace manufacturing firm, plans to make its second acquisition in Europe this year as it aims to bag more orders from companies such as Airbus.
The firm intends to spend upto $50 million (Rs 320 crore) to acquire a supplier who builds systems for large civil and military planes to firms such as Airbus.
“We are actively looking at companies in areas where we lack gaps - landing gear components, actuations and long bed machining,” Aravind Melligeri, chairman and chief executive of Aequs told Business Standard. “Next two quarters, we should close the deal”
In June, Aequs acquired a Paris-based aerospace component maker T&K Machine Inc for $10 million (Rs 63 crore). T&K Machine Inc makes components and systems for firms such as Spirit Aerosystems and Triumph Group, who are suppliers to Boeing.
T&K, which will be renamed as Aequs Aero Machine, makes long wings crucial for large planes.
“Look at Europe; this is best time to buy. While the economy is under stress, aerospace companies are doing well. They are immune to local economy,” Melligeri said. “It is not (just) customers, it is the local footprint, local delivery ability, talent, account management”.
Aequs has a manufacturing facility in Belagavi, in Northern Karnataka in a 250-acre special economic zone. It produces aerospace components and systems for global firms such as Airbus, Honeywell, Saab, Magellan and United Technologies. The factories, set up in 2009 with an investment of Rs 500 crore, employ over 1,000 people and make wing parts for Airbus 380 planes.
Aequs earned revenue of $25 million in fiscal 2015 and expects to nearly double it to $45 million in the current fiscal.
Aequs earned revenue of $25 million in fiscal 2015 and expects to nearly double it to $45 million in the current fiscal.
“We want to be a global player. What we want to tell our customers is why do you worry where the parts are made? Where does it come from? What you should worry about is quality and (delivery of the parts) within the time frame,” Melligeri said.
He expects consolidation in the aerospace components and supplier base in Europe and US, which will offer opportunities for firms such as Aequs.
The firm, which exports nearly all of what it produces, plans to invest Rs 630 crore to beef up its manufacturing facility as it sees more orders from customers.
“Global companies are reducing the supply chain. There are lot of mom and shops with revenue of $5 million to $10 million. They want to condense, reduce the number of suppliers and hold the large suppliers more accountable,” said Melligeri. “We look at this as an opportunity”
Aequs is working on 2020 strategy to be large supplier of systems in critical segments such as castings, landing gear components, long bed machining and engine components to global aerospace firms.
