It is an old method to strengthen business, yet it is one of the most effective one.
Acquire a running business and you can fast forward your business.
Yes, this is what Heico – a parts provider and aftermarket specialist did as it acquired Optical Display Engineering (ODE).
ODE is a Part 145 FAA authorized repair station and a parts manufacturing authority (PMA). This company is into repairing liquid crystal display screens and modules for military and civilian aircraft.
It was an all-cash deal, but, except that nothing else has been told by Heico. The company says benefits of the acquisition will be seen in the coming years.
Larry Mendelson, Heico CEO and Chairman, expressed his pleasure on the latest acquisition and expects Heico will broaden its avionics and aviation expertise with the new deal.
ODE which is based in Irvine, California will form part of the Inertial Aerospace Services FAA / EASA station.
Dear readers in case you are not aware – Inertial Aerospace Services works on inertial guidance repairs.
PMAs are developed by flight specialists for different types of aircraft applications such as mechanical components, keypads and displays.
Just few days before making this deal, while sharing the quarterly financial update to analysts and investors, Heico leaders had hinted about making more acquisitions.
Analysts are quite pleased with the performance of Heico after they had a look at the financial reports of this Hollywood, Florida based company. Analysts are quite optimistic about the future prospects of the company.
Ken Herbert, an analyst from Canaccord Genuity aviation has to say about Heico – the third quarter 2018 results are better than what they had expected.
Heico is quite active in acquiring companies and it has laid its requirements online – for a new business the company wants the business to have $50 million to $250 million in sales.
It gives preference to companies that have their headquarters in Europe or North America.
With revenue increase at a compound annual growth rate of 26% since 1990 of which nearly 50% is through acquisitions, Heico is certainly big on acquiring.