Aerospace firm HerouxDevtek sells chunk of business to focus on landing gear

Aerospace firm Heroux-Devtek sells chunk of business to focus on landing gear by LuAnn LaSalle, The Canadian Press Posted Jul 17, 2012 2:58 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email MONTREAL – Quebec aerospace manufacturer Heroux-Devtek Inc. will focus on its landing gear division with the $300 million sale of about one-third of its business to a U.S. firm in a cash deal that sent the company’s stock soaring on Tuesday.Shares in Heroux-Devtek (TSX:HRX) jumped 32 per cent, or $2.50, to $10.35 on the Toronto Stock Exchange. Earlier they traded as high as $11.75 and beat a record high of $10 per share set at the end of 2001.Precision Castparts Corp. of Portland, Ore. (NYSE:PCP), will acquire Heroux-Devtek’s Aerostructure and Industrial Products division, which had about $130 million of annual sales — about one-third of its total revenue.Chief executive Gilles Labbe said Heroux-Devtek will focus on growth and possible acquisitions in its landing gear business.“Our vision is to continue to build Heroux-Devtek into a Quebec-based world-class organization in this core market,” Labbe told analysts on a conference call to discuss the deal.Heroux-Devtek is one of the Canadian companies that’s involved in the Lockheed Martin F-35 jet fighter program, a multi-country initiative led by the United States, which has faced cost and timetable overruns.“We are big players in the F-35,” Labbe said of the radar-evading fighter jet.“We design and build all of the outlook system for the F-35 in Canada and we also build some structural components in Canada, but of course our structure business will be sold. So all of the structure business we do on the F-35 will be taken over by Precision Castparts.”The Montreal-area company will remain significantly involved in the F-35 program through the landing-gear business that it’s keeping, he said.“I think we will look at other opportunities with Lockheed. I think we will continue to build this relationship.”Cormark Securities analyst David Newman said it was a good move to sell the products division to Precision Castparts, an established aerospace supplier.“We believe the deal timing was ideal given the aerostructure business was potentially at the cusp of facing more pressure due to increasing scrutiny of Lockheed Martin’s F-35 JSF program (cost overruns, etc.), while the industrial products business had almost fully recovered in terms of sales and solid margins following the recession,” Newman wrote in a research notePrecision Castparts chairman and CEO Mark Donegan said the acquisition builds on its aerostructures business and will increase his company’s reach.“In addition to serving our current customer base, Heroux-Devtek strengthens our presence with such key customers as Lockheed, Bombardier, and Gulfstream,” Donegan said in a statement.Meanwhile, Heroux-Devtek’s Labbe said there are opportunities to increase growth in the landing gear division and the company will be in a stronger position to do so as a result of the sale of its other division.“It will be a more pure play in the aerospace business and a niche market also. We will develop more and more engineering products in the aerospace sector,” he said.“We found a way to unlock shareholder value and now we will concentrate on what we know best. The business that we are keeping represents two-thirds of the revenue.”But Cormark’s Newman also said while Heroux-Devtek will focus on the landing gear market, he didn’t rule out the company selling it, too, to generate more value for shareholders.“Ultimately, we believe the remaining landing gear business could be sold,” he said noting the division has generated about $250 million in sales and 55 cents to 60 cents in earnings per share.After the sale, Heroux-Devtek will have more than 1,000 employees in Canada and the United States with about $250 million of annual revenue.Labbe said related landing gear products such as gear retraction systems and flight controls can be developed by the company’s engineers and sold.The deal affects Heroux-Devtek’s aerostructure and industrial products locations in suburban Montreal, Mexico, Texas and Ohio that employ about 440 people in total.Labbe said Precision Castparts Corp. wants to make the aerostructure components and industrial products division a world leader. read more

Great Basin Golds shaft development LKABs new iron ore mine Massey Energys

first_imgLatest issue of International Mining Project News available (May 21): “Australia’s proposed resources tax may set an industry benchmark”. This is the opinion of many mining analysts, only weeks after the original announcement was met with outrage from interested parties. Now, other governments are looking at the proposal and considering whether to implement a similar system. Chile was the first to draw up similar plansand Brazil or China could be the next. Fortunately, most companies are still pursuing project developments. Great Basin Gold says it has completed the sinking phase of the vertical shaft at its Burnstone operation in South Africa, part of the $33 million development in Q1, 2010. There was also news from LKAB earlier in the month, which are opening up a new mine near Svappavaara in Sweden. First Quantum Minerals has an update on its recently acquired Ravensthorpe nickel mine in Western Australia, Massey Energy is expanding several of its coal operations in Pike County, Kentucky and Buchanan County, Virginia, USA, and much more.At Burnstone, Great Basin Gold has also made good progress in the construction of the mill facility. As a result of an increased amount of activity related to the Burnstone mill facility, the capital expenditure is expected to increase to $58 million in the second quarter. The company has also made progress in the development of surface and underground infrastructure at the operation. As of May 6, 2010, some 2,667 m of decline development was completed, with 65 m remaining to be done before it is linked up with the vertical shaft. A total of 1,842 m of on-reef development has been completed to date and good continuity is shown in the exposed part of the reef. The long hole stoping trials are progressing well and the rate of mining is expected to increase as more mining areas become available. The company plans to implement this form of mechanised mining on a trial basis over a nine to 12 month evaluation period. A total of about 77,095 t has been accumulated on the ore stockpiles which will be used for the mill commissioning.Still in South Africa, Gold Fields has received approval from the South African Department of Mineral Resources for the conversion of its South Deep old order mining right into a new order mining right. Included in this approval, as a new right, is an additional portion of ground known as Uncle Harry’s, which is contiguous to South Deep. It contains a mineral resource of about 70.7 Mt at 5.8 g/t Au (at a cutoff grade of 3.0 g/t Au), which is largely above the existing South Deep infrastructure. In addition to gold the new order mining right covers silver, uranium, nickel and pyrite.At Ravensthorpe, First Quantum has engaged an engineering firm and is proceeding with the detailed design of modifications for the nickel process plant, of which a significant part will be the modification of the crushing, conveying, stockpile, reclaim and rejects handling areas of the plant. The modification works are planned to be completed during Q1, 2011 and will be followed by around six months of commissioning and ramp-up. The company expects Ravensthorpe’s average annual production of nickel metal to be about 39,000 t for the first five years, after recommencement of operations, and an average annual production of 28,000 t of nickel metal over the expected mine life of 32 years.In Sweden, LKAB has been granted an environmental permit for the new mine at Gruvberget. The ruling by the Environmental Court means that it can move ahead with plans to increase production of finished products by 10 Mt/y. LKAB’s President, Lars-Eric Aaro: “We’re aiming for 37 Mt, and Gruvberget will be an important step towards reaching that target. We must do this to be able to keep pace with our customers who wish to grow. Since the completion of our investments in new pelletising plants and upgraded logistics, the mines have been the bottleneck in the chain of production. Quite simply, we need more iron ore.”There is also news from Ivanhoe Mines, which has a new, independent integrated development plan for its Oyu Tolgoi copper/gold project in southern Mongolia. The new plan, IDP-10, is a comprehensive update of the original 2005 plan and supports the company’s commitment to advance Oyu Tolgoi into full construction, with production of copper and gold expected to begin in 2013. The development blueprint contains the first published declaration of underground reserves for the planned Hugo Dummett block-cave mine. The study examines two scenarios, with both cases resulting in average production, over the first ten years, exceeding 1,200 MIb of copper and 650,000 oz of gold.In the US, Massey Energy’s coal expansion involves its Roundbottom surface mine – consisting of around 145,120 surface tonnes and 272,100 highwall miner tonnes, Hurricane Branch Trace Fork mine – a metallurgical quality coal operation consisting of some 104,305 surface tonnes and 163,260 highwall miner tonnes, and a potential 7.2 Mt (reserves) metallurgical coal operation in Washington County, Pennsylvania.To receive the full 40+ page report, subscriptions to this service can be registered and paid for on-line (SUBSCRIBE TO IM PROJECT NEWS BUTTON), or contact [email protected] for a free trial copy.last_img read more