Aviation

Wichita firms part of Berkshire Hathaway acquisition

Precision Castparts said Monday it has agreed to be acquired by Warren Buffett’s Berkshire Hathaway. Precision owns three Wichita aircraft suppliers, including Exacta Aerospace, shown here in 2012.
Precision Castparts said Monday it has agreed to be acquired by Warren Buffett’s Berkshire Hathaway. Precision owns three Wichita aircraft suppliers, including Exacta Aerospace, shown here in 2012. File photo

Three Wichita aircraft suppliers are on their way to becoming part of Warren Buffett’s Berkshire Hathaway.

On Monday, Precision Castparts said it had agreed to be acquired by Berkshire in a deal valued at $37.2 billion, including debt.

Precision Castparts, based in Portland, Ore., owns Brittain Machine, Weaver Manufacturing and Exacta Aerospace. The local firms are among 155 manufacturing facilities Precision Castparts owns.

In addition to aerospace, Precision Castparts manufactures parts for the general industrial and power industries.

“I’ve admired PCC’s operation for a long time,” Buffett, chairman and CEO of Berkshire, said in a news release. “For good reasons, it is the supplier of choice for the world’s aerospace industry, one of the largest sources of American exports.”

Precision Castparts has slightly more than $10 billion in annual sales and $1.5 billion in net income. It has more than 30,000 employees worldwide.

Figures for its employment in Wichita were not immediately available Monday from the company.

“We are very pleased to be joining forces with Berkshire Hathaway,” Mark Donegan, Precision Castparts chairman and CEO, said in the release. “We see a unique alignment between Warren’s management and investment philosophy and how we manage PCC for the long-term.

“We believe that as part of Berkshire Hathaway, PCC will be exceptionally well-positioned to support our customers’ needs into the future.”

Analysts such as Peter Arment of Sterne Agee CRT said in notes to investors Monday morning that an acquisition by Berkshire made sense.

“We have thought for long time that (Precision Castparts) would be great strategic fit for the Berkshire Hathaway portfolio as it’s in a growth industry (both organic and inorganic), has significant market shares in all platforms, high barriers to entry, and is very profitable with industry leading operating margins,” Arment wrote.

Precision Castparts rolled up Weaver and Brittain as part of an acquisition of Synchronous Aerospace Group in 2012, followed by its August 2013 acquisition of Exacta. Weaver is located at 1005 E. 17th, while Brittain’s facilities are at 2520 S. Sheridan. Exacta is at 4200 W. Harry.

Berkshire’s acquisition of Precision Castparts is expected to be completed in the first quarter of 2016, pending shareholder approval. Precision Castparts will retain its name following the acquisition as well as its Portland headquarters.

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com. Follow him on Twitter: @jsiebenmark.

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