Targeted Strategies for Today's Evolving Markets

MissionIR Blog

B/E Aerospace (BEAV) to Acquire TSI Group to Saturate Aerospace Industry

B/E Aerospace, a global leading manufacturer of aircraft cabin interior products and the world’s leading distributor of aerospace fasteners and consumables, recently announced it has inked an acquisition agreement with the shareholders of TSI Group Inc., a leading designer, engineer and manufacturer of thermal management and interconnect solutions for the aerospace and defense industries.

Thermal management technology was initially designed and required for the development of power management on military sub-systems for various aircrafts, ground systems, and an array of electrical and computing uses – the technology is now more focuses on the commercial aerospace market.

Amin J. Khoury, chairman and CEO of B/E Aerospace, noted future growth expectations of thermal management in the next 10 years, as well as its role in the aerospace industry.

“Demand for aerospace thermal management products and systems is expected to grow at a healthy rate over the next decade as a result of changing electronics technologies at both the component and system level as well as the continued introduction of More Electric Aircraft (MEA), such as the Boeing B787 and B747-8 and the Airbus A350. Power management products have become critical components for the newer MEA, and demand for truly innovative power management solutions is growing as power and computing requirements increase, as space becomes more limited, and as heat dissipation and payload weight become more critical. In addition, there is also greater emphasis on control of EMI/RFI emissions from aircraft power equipment, requiring efficient, electrically quiet designs,” Khoury stated in the press release.

More than 70 percent of TSI’s revenues are derived from long-term agreements with several premier customers; most of the company’s business is currently derived from long-lived viable and growing military platforms, and commercial applications currently represent about 20 percent of TSI’s revenues.

Khoury said TSI provides B/E Aerospace with an opportunity to strengthen and extend its growth efforts.

“TSI’s deep technological and manufacturing capability will enhance B/E’s aircraft cabin interior strategic position by enabling B/E to provide more advanced, integrated electronics packaging for aircraft cabin interior products including; seating, in-flight entertainment systems, LED lighting, food and beverage preparation and storage equipment, and oxygen systems. …,” Khoury stated.

“TSI is well-positioned to leverage its market leadership position in the growing thermal management market and is expected to benefit from the continuing shift towards increasingly complex power management solutions required by expanding computing capacity and larger power supplies in smaller packages. Combining TSI’s thermal management capabilities with B/E’s internally developed thermal management technologies and B/E’s excellent reputation in the integration, program management and certification of aircraft interiors, together with B/E Aerospace’s strong relationships with its commercial aerospace customers is expected to further expand TSI’s presence in the commercial aerospace industry. This product line expansion should enhance our ability to serve our OEM and global airline customers in the commercial aerospace industry and is expected o create significant value for our shareholders,” he said.

BE will pay a purchase price of approximately $310 million in cash for TSI, representing a multiple of approximately 2.0 times TSI’s expected current year revenues and approximately 9.5 times TSI’s current year estimated earnings before interest, taxes, depreciation and amortization.

For more information visit

Let us hear your thoughts below:

This entry was posted in Small Cap News. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *