HEICO Corporation Acquires Leading Provider of Proprietary Aircraft Cockpit Emergency Egress and Aerial Delivery Solutions

Rhea-AI Summary

HEICO (NYSE:HEI.A)(NYSE:HEI) has announced the acquisition of Capewell Aerial Systems' Aerial Delivery and Descent Devices divisions for an undisclosed cash amount. Capewell is a leading provider of proprietary aircraft cockpit emergency egress and aerial delivery products for commercial aerospace and defense uses. The acquisition is expected to be accretive to HEICO's earnings within a year.

Capewell's product portfolio includes emergency descent devices, personnel and cargo parachute products, and heavy airdrop platforms. The company has been a critical supplier to OEMs, end-users, and distributors since 1881, with its hardware being standard equipment on US military parachutes since 1942.

This acquisition adds to HEICO's Specialty Products Group operations, enhancing its capabilities in manufacturing high-reliability, mission-critical components for aerospace and defense customers.

Positive

• Acquisition expected to be accretive to earnings within a year
• Expands HEICO's product portfolio in aerospace and defense sectors
• Adds critical supplier relationships with OEMs, end-users, and distributors
• Enhances HEICO's Specialty Products Group operations

Negative

• None.

Insights

Financial Analyst

HEICO's acquisition of Capewell's Aerial Delivery and Descent Devices divisions is a strategic move that expands its product portfolio in the aerospace and defense sectors. This cash acquisition is expected to be accretive to earnings within a year, signaling potential positive financial impact for HEICO.

The deal strengthens HEICO's position in high-reliability, mission-critical components, particularly in the lucrative defense market. Capewell's established customer base and long-standing reputation since 1881 add significant value. While specific financial details weren't disclosed, the acquisition's accretive nature suggests it was priced reasonably relative to expected earnings contribution.

Investors should monitor how well HEICO integrates Capewell and capitalizes on cross-selling opportunities. The acquisition aligns with HEICO's growth strategy and could drive long-term value creation if synergies are realized effectively.

Aerospace Industry Expert

This acquisition significantly enhances HEICO's capabilities in critical safety equipment for the aerospace sector. Capewell's expertise in emergency egress and aerial delivery systems fills a important niche in HEICO's product lineup, potentially opening doors to new contracts and customers.

The deal is particularly noteworthy given Capewell's long-standing relationship with the US military since 1942. This established presence in the defense sector could provide HEICO with increased stability and recurring revenue streams, especially valuable during commercial aviation downturns.

Moreover, the acquisition aligns with the growing emphasis on safety and reliability in both commercial and military aviation. As regulations and standards continue to evolve, HEICO is now better positioned to meet these demands, potentially leading to increased market share and revenue growth in the long term.

SOUTH WINDSOR, CT and MIAMI, FL / ACCESSWIRE / August 22, 2024 / HEICO Corporation (NYSE:HEI.A)(NYSE:HEI) today announced its Flight Support Group has acquired the Aerial Delivery and Descent Devices divisions of Capewell Aerial Systems ("Capewell") for cash at closing. Additional financial details were not disclosed.

HEICO stated that it expects the acquisition to be accretive to its earnings within the year following closing.

Connecticut-based Capewell is a leading provider of proprietary aircraft cockpit emergency egress and aerial delivery products for various commercial aerospace and defense uses. It is a critical supplier to a wide-ranging customer base that includes leading OEMs, end-users, and distributors. Capewell's highly engineered product portfolio encompasses emergency descent devices ("EDDs"), personnel and cargo parachute products, heavy airdrop platforms, and other highly-engineered products.

The Company's history dates back to 1881 in Hartford, Connecticut. Capewell expanded its product offering in 1939, when it collaborated with the US government to develop specialized hardware for paratroopers. Capewell's hardware has been standard equipment on US military parachutes since the first Army Airborne parachute units were trained at Fort Benning, Georgia, in 1942. In the decades since, Capewell expanded its development and manufacturing of a full-range of descent and delivery systems for military and commercial applications.

The Survivability division of Capewell will be retained by Argosy Private Equity of Wayne, PA, under the Aerial Machine & Tool Corp brand.

Capewell adds additional products and capabilities to HEICO's rapidly-growing and highly-successful Specialty Products Group operations which are dedicated to manufacturing high-reliability, mission-critical components for primarily aerospace and defense customers.

Laurans A. Mendelson, HEICO's Chairman and Chief Executive Officer, along with Eric A. Mendelson, HEICO's Co-President and CEO of its Flight Support Group commented, "We are proud to welcome Capewell and its Team Members into the HEICO family. Capewell's products are manufactured to the highest reliability and product quality standards, as they are responsible for ensuring pilot and troop safety worldwide. We look forward to supporting Capewell's growth and building on its storied legacy."

HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO's customers include a majority of the world's airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at https://www.heico.com.

Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others: the severity, magnitude and duration of public health threats, such as the COVID-19 pandemic; our liquidity and the amount and timing of cash generation; lower commercial air travel, airline fleet changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; cyber security events or other disruptions of our information technology systems could adversely affect our business; and our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals, and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation, within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties receiving this material are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

CONTACT:	Eric A. Mendelson	(954) 744-7555
	Carlos L. Macau, Jr.	(954) 744-7562

SOURCE: HEICO Corporation

View the original press release on accesswire.com

FAQ

What company did HEICO (HEI) acquire in August 2024?

HEICO acquired the Aerial Delivery and Descent Devices divisions of Capewell Aerial Systems in August 2024.

How will the Capewell acquisition impact HEICO's (HEI) earnings?

HEICO expects the acquisition of Capewell's divisions to be accretive to its earnings within the year following the closing of the deal.

What products does Capewell Aerial Systems provide that HEICO (HEI) has acquired?

Capewell provides proprietary aircraft cockpit emergency egress and aerial delivery products, including emergency descent devices, personnel and cargo parachute products, and heavy airdrop platforms.

How long has Capewell been supplying hardware for US military parachutes?

Capewell's hardware has been standard equipment on US military parachutes since the first Army Airborne parachute units were trained at Fort Benning, Georgia, in 1942.