HEICO Corporation Acquires Leading Business Jet In-Cabin Component Maker
Rhea-AI Summary
HEICO has acquired approximately 88% of Mid Continent Controls, Inc. (MC2), a leading business jet in-cabin component maker, for an undisclosed cash amount. MC2 specializes in proprietary in-cabin power and entertainment components for business jets, including power outlets, cabin management systems, and multimedia connectivity ports. The acquisition is expected to be accretive to HEICO's earnings within a year.
MC2, based in Derby, KS, employs about 60 people and will continue to operate from its current location. Key managers, including Thomas Hemphill (President) and Mike Freel (General Manager), will retain ownership stakes and continue leading the company. MC2 will report to HEICO's Radiant Power Group. HEICO expects no material employee turnover from the acquisition.
Positive
- Acquisition of 88% stake in MC2, a niche manufacturer of business jet components
- Expected to be accretive to earnings within a year
- Expands HEICO's presence in the business jet market
- Retention of key MC2 management, ensuring continuity
- No expected material employee turnover, maintaining operational stability
Negative
- None.
News Market Reaction
On the day this news was published, HEI gained 0.08%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
MIAMI, FL and DERBY, KS / ACCESSWIRE / October 21, 2024 / HEICO Corporation (NYSE:HEI.A)(NYSE:HEI) today announced that its Electronic Technologies Group acquired approximately
HEICO stated that it expects the acquisition to be accretive to its earnings within the year following the acquisition.
Derby, KS-based MC2 is a niche designer and manufacturer specializing in proprietary in-cabin power and entertainment components and subsystems for business jets. Its core products include power outlets, power distribution modules, cabin management systems, multimedia connectivity ports, seat controls and switch panels.
MC2's products enhance the aircraft user experience, enabling passengers to mirror their ground experience in the air as they stay connected in flight. The company offers hundreds of different niche parts used on a wide range of business aircraft, while serving both new aircraft production and the aftermarket.
Founded in 1996 by industry veteran Rick Hemphill, MC2 employs approximately 60 people at its Derby, KS engineering, production and testing facility. Rick Hemphill's son, Thomas Hemphill, will continue leading MC2 as its president, along with Mike Freel, MC2's General Manager. Thomas Hemphill and Mr. Freel will also remain company shareholders. Rick Hemphill will continue as a guiding consultant to MC2. HEICO stated that MC2 will operate from its Derby, KS location and that it does not expect material Team Member turnover to result from the acquisition. MC2 will report to HEICO's Radiant Power Group, which serves some of the same markets as MC2.
Laurans A. Mendelson, HEICO's Chairman and Chief Executive Officer, along with Victor H. Mendelson, HEICO's Co-President and Anish V. Patel, Radiant Power's President, together remarked, "Mid Continent Controls is a very special company known for excellent products, quality and customer service. Their approach to business and their entrepreneurial energy are exactly what we look for in acquisitions. We welcome Tom, Mike, Rick and the entire Mid Continent Controls team to the HEICO family."
Rick Hemphill, Tom Hemphill and Mike Freel jointly commented, "After decades carefully building this special business, we wanted Mid Continent Controls to be part of a great company which values our people, customers and way of doing business as much as we have. We feel we found that partner in HEICO and are excited about the potential we can accomplish together."
TM Capital LLC represented the sellers in the transaction. HEICO was not externally represented.
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 Information:
Victor H. Mendelson
(305) 374-1745 ext. 7590
Carlos L. Macau, Jr.
(954) 987-4000 ext. 7570
SOURCE: HEICO Corporation
View the original press release on accesswire.com
FAQ
What percentage of Mid Continent Controls did HEICO acquire?
How will the MC2 acquisition affect HEICO's earnings (HEI)?
What products does Mid Continent Controls (MC2) manufacture?
Will there be any changes to MC2's management after the HEICO acquisition?
