SKF divests non-core aerospace operation for USD 220 million

Rhea-AI Summary

SKF has signed an agreement to divest its ring and seal operation in Hanover, Pennsylvania to Carco PRP Group's subsidiary PCTI for USD 220 million (approximately SEK 2.3 billion). The facility, which manufactures mechanical seals and rings with annual sales of SEK 700 million, is being sold as part of SKF's strategic review to focus on core aerospace business. SKF will continue to concentrate on aeroengine and aerostructure bearing offers, representing annual sales of SEK 6 billion. The company is also planning to exit its precision elastomeric device operation in Elgin, Illinois. The Hanover divestment is expected to close in Q1 2025, subject to regulatory approval.

Positive

• Sale of non-core asset for USD 220 million at accretive multiples
• Strategic focus on core aerospace business with SEK 6 billion annual sales
• Streamlining operations to improve profitability and growth

Negative

• Reduction in total revenue stream by SEK 700 million annually

GOTHENBURG, Sweden, Oct. 29, 2024 /PRNewswire/ -- SKF is committed to creating a more focused and resilient company to serve its customers even better and accelerate profitable growth. As part of the decision from the Group's strategic review of its aerospace business, communicated on 27 October 2023, to focus on core aerospace business and to exit areas that are non-strategic, SKF has signed an agreement to divest its ring and seal operation in Hanover, Pennsylvania, USA.

The Hanover ring and seal operation is divested to Carco PRP Group, through its US aerospace subsidiary, PCTI, for a total enterprise value of USD 220 million, corresponding to approximately SEK 2.3 billion. The Hanover facility manufactures mechanical seals and rings, representing 2023 annual sales of approximately SEK 700 million.

"I'm pleased that we have been able to deliver on our prior promises and successfully reached an agreement to divest this successful but non-core business at accretive multiples. With a new owner, I'm confident that Hanover will continue to provide customers with top quality solutions. Aerospace will remain one of our largest customer industries and we will continue to invest and strengthen our position in core Aerospace segments", says Rickard Gustafson, President and CEO.

SKF will continue to focus its aerospace business around high growth core areas related to aeroengine and aerostructure bearing offers, representing annual sales of approximately SEK 6 billion. The customer offering in these core areas will be further strengthened through investments in product development, customer service and state of the art manufacturing.

As previously announced, SKF is exploring options to exit the precision elastomeric device (PED) aerospace operation in Elgin, Illinois, USA. The PED business is also non-strategic but smaller than Hanover and the exit process is proceeding according to plan.

The Hanover divestment is expected to close during the first quarter of 2025, subject to authorities' approval.

Aktiebolaget SKF 
      (publ) 

CONTACT:

For further information, please contact:
PRESS: Carl Bjernstam, Head of Media Relations
tel: 46 31-337 2517; mobile: 46 722-201 893; e-mail: carl.bjernstam@skf.com

INVESTOR RELATIONS: Sophie Arnius, Head of Investor Relations
tel: 46 31-337 8072; mobile: 46 705-908 072; e-mail: sophie.arnius@skf.com

 

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SOURCE SKF

FAQ

How much is SKF (SKFRY) selling its Hanover aerospace operation for?

SKF is selling its Hanover ring and seal operation for USD 220 million (approximately SEK 2.3 billion) to Carco PRP Group's subsidiary PCTI.

When will SKF (SKFRY) complete the Hanover facility divestment?

The Hanover facility divestment is expected to close during the first quarter of 2025, subject to authorities' approval.

What is the annual sales value of SKF's (SKFRY) Hanover operation being sold?

The Hanover facility being sold represents annual sales of approximately SEK 700 million.

What will be SKF's (SKFRY) remaining aerospace business focus?

SKF will focus on core aerospace areas related to aeroengine and aerostructure bearing offers, representing annual sales of approximately SEK 6 billion.