Goodrich’s AIS Acquisition, and Its Implications

On Nov 17/09, J.F. Lehman & Company reached an agreement to sell Atlantic Inertial Systems to Goodrich Corporation, for about $375 million, subject to customary government approvals. AIS’ 2009 sales are expected to be approximately $180 million, but that’s expected to grow significantly over the next several years. Hence the price of approximately 9x estimated adjusted EBITDA. Goodrich saw AIS’ portfolio of inertial sensors, inertial measurement units (IMUs), integrated IMU/GPS systems, stability systems, and terrain avoidance systems as an excellent complement to Goodrich’s guidance, control and navigation systems. AIS joins other recent Goodrich acquisitions such as Sensors Unlimited, TEAC Aerospace, former CROWS manufacturer Recon/Optical, and Cloud Cap Technology. As James Hasik, our February 2009 guest author of “Arming the Bug Hunt: Industry Changes and Opportunities” points out, the most interesting fact is never mentioned in the releases: AIS had spun out of BAE systems in 2007, for $140 million in cash. Hasik notes: “After pulling it out of its parent company, Lehman more than doubled AIS’s value in two years, and in deteriorating military-economic conditions. That’s such a healthy return that it may lead one to ask why BAE Systems itself couldn’t realize this value from the property. Even so, […]