Hanwha Aerospace has signed a deal to fully acquire EDAC Technologies, an American aircraft engine component manufacturer. The deal is expected to be worth around USD 300 million, which will be finalised once negotiations are completed.
The Korean company made a preliminary bid for EDAC Technologies in April of 2019 and entered a period of due diligence before making a final offer.
EDAC Technologies is an aircraft engine component manufacturer based in Connecticut, with a workforce of 590 people. It recorded USD 150 million in revenue in 2018.
Its primary customers are GE and Pratt & Whitney and it produces aircraft engine components such as integrally bladed rotors and engine cowling.
Through this acquisition, Hanwha Aerospace will be able to secure a foothold alongside leading global aircraft engine manufacturers, obtain more orders, and expand its product portfolio.
EDAC Technologies also provides high-end processing capabilities to make Hanwha Aerospace even more competitive.
The acquisition provides design, development, and technological capabilities for Hanwha Aerospace to become a Tier-1 supplier for risk and revenue sharing partnerships. In addition, it provides a base from which Hanwha Aerospace can expand its American operations.
“Based on the advanced technology we’ve acquired over the past 40 years and our product quality, we’ve recently entered into risk and revenue sharing partnerships, which have high barriers of entry in the global aircraft engine market,” said President and CEO of Hanwha Aerospace Hyun-woo Shin.
He added: “With our acquisition of EDAC, we will continue to expand our global presence to achieve our goal of becoming the world’s number one partner in the aircraft engine industry.”
Due to the increasing amount of air travel and cargo volume, the global aircraft engine component market is expected to grow by 6% annually and reach USD 54.2 billion by 2025. To help foster this growth, Hanwha announced that it will invest KRW four trillion by 2022 to expand its aircraft component and defense units overseas.
Hanwha Aerospace is Korea’s only gas turbine engine manufacturer. It entered the aircraft engine industry in 1979, providing maintenance services for gas turbine engines. Since then, Hanwha Aerospace has produced over 8,600 aircraft engines.