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Follow your favorite stocksCREATE FREE ACCOUNTwatch nowVIDEO2:3302:33GE Aerospace to buy Consolidated Precision Products for $11.75BSquawk BoxGE Aerospace said on Tuesday it would buy castings supplier Consolidated Precision Products from investment firms Warburg Pincus and Berkshire Partners for $11.75 billion, as the aerospace giant seeks to bolster in-house manufacturing.
Engine makers are racing to increase output and ease supply-chain risks that have constrained production, as strong demand for new aircraft and aftermarket spare parts continues to drive orders.
With this deal, GE Aerospace could gain greater control over a key source of precision castings used in jet engines.
"Investing in mission-critical casting capacity is needed to support the strong simultaneous demand across commercial engines, aftermarket and defense," CEO Larry Culp said.
"By combining GE Aerospace's technology capabilities and flight deck with CPP's manufacturing experience, we expect to expand capacity, improve performance and accelerate new engine technologies for the current fleet and next-generation platforms."
CPP is one of the world's largest producers of investment and precision sand castings, supplying components for commercial and military aircraft, helicopters, weapon systems and industrial gas turbines.
The company employs about 6,600 people across more than 20 facilities worldwide and has been a supplier to GE Aerospace for more than 15 years.
The deal, likely to close in the second half of 2027, is expected to boost GE Aerospace's adjusted profit per share and free cash flow in the first year.
GE Aerospace is paying the equivalent of 26 times CPP's expected 2027 core profit, excluding anticipated integration benefits. Including those benefits, the deal values CPP at 18 times its projected 2027 EBITDA, or earnings before interest, taxes, depreciation and amortization.
Its shares were largely flat in premarket trading.
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