GE Aerospace to Acquire Supplier Consolidated Precision for $11.75 Billion

GE Aerospace announced Tuesday it has agreed to acquire Consolidated Precision Products (CPP) from private equity firms Warburg Pincus and Berkshire Partners for $11.75 billion. The acquisition is a strategic move to secure the supply of critical components amid high demand for aircraft engines and parts.

Deal Rationale and Structure

The acquisition aims to address a growing need for casting capacity as demand rises across commercial aviation, aftermarket services, and defense sectors, according to GE Aerospace Chairman and CEO H. Lawrence Culp, Jr. CPP is a major manufacturer of complex castings and sub-assemblies used in aircraft engines, weapon systems, and industrial gas turbines. GE Aerospace, which has been a customer of CPP for over 15 years, plans to combine its technology with CPP's manufacturing expertise to expand capacity and accelerate the development of new engine technologies.

The key terms of the transaction include:

• Total Price: $11.75 billion
• Financing: $7 billion in cash and the remainder in new debt.
• Target Company: Cleveland-based Consolidated Precision Products, which employs approximately 6,600 people.

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Financial Outlook and Market Impact

GE Aerospace stated the transaction is expected to be accretive to adjusted earnings per share (EPS) and free cash flow within the first year of closing. The company also confirmed the deal will not alter its existing capital allocation strategy. The purchase price values CPP at approximately 18 times its projected 2027 EBITDA, including anticipated net synergies, or about 26 times without them.

The deal is slated to close in the second half of 2027, pending regulatory approvals and other standard closing conditions. Following the announcement, shares of GE Aerospace traded roughly flat in pre-market activity on Tuesday, according to Investing.com. Evercore and PJT Partners are serving as lead financial advisors to GE Aerospace, while Morgan Stanley and Guggenheim Securities are advising CPP.