FORT COLLINS, Colo. – Woodward Inc. (NASDAQ:WWD), known for its aerospace and industrial control solutions, has entered into a definitive agreement to acquire the electromechanical actuation business of Safran (EPA:SAF) Electronics & Defense, the companies announced today. This acquisition encompasses operations in the United States, Mexico, and Canada, including intellectual property and long-term customer agreements.
The transaction, which is expected to close by mid-2025 subject to regulatory approvals and customary closing conditions, will see Woodward taking over the production of Horizontal Stabilizer Trim Actuation (HSTA) systems. These systems, which are critical for aircraft stabilization, are notably utilized in the Airbus A350.
Woodward's Chairman and CEO, Chip Blankenship, remarked that the acquisition is in line with the company's growth strategy and will enhance its offerings for widebody aircraft programs as well as its technology platform for future single-aisle aircraft. According to InvestingPro data, Woodward has maintained dividend payments for 52 consecutive years, demonstrating consistent financial stability. Subscribers can access 8 additional ProTips about WWD's financial performance on the platform. Blankenship expressed confidence that the move would serve customers well and boost shareholder value over the long term.
Franck Saudo, CEO of Safran Electronics & Defense, echoed the sentiment, anticipating a smooth transition for customers. Saudo also noted that this step is part of Safran's broader strategy as it prepares to acquire actuation and flight control activities from Collins Aerospace.
The financial details of the deal have not been disclosed, and the acquisition is not expected to have a material financial impact on Woodward. Further information will be provided in subsequent periodic reports as required by regulatory guidelines.
Woodward, headquartered in Fort Collins, Colorado, is a global player in the design and manufacture of energy control solutions for aerospace and industrial markets. Safran, a high-technology group with a presence in aviation, defense, and space sectors, operates globally and is known for its on-board intelligence solutions.
This move is viewed as an alignment of Woodward's expertise in energy control with Safran's advanced electromechanical systems, potentially enhancing the capabilities of both entities in the aerospace industry. With an overall financial health score of "GOOD" according to InvestingPro analysis, and a comfortable current ratio of 1.89, Woodward appears well-positioned to execute this strategic acquisition. The information for this article is based on a press release statement and InvestingPro's comprehensive research report, which provides detailed analysis of WWD among 1,400+ US stocks.
In other recent news, aerospace and industrial giant, Woodward, Inc., posted record-breaking revenues for fiscal year 2024, surpassing the $3 billion mark for the first time. This milestone was achieved due to significant growth in both Aerospace and Industrial segments, with earnings per share reaching an all-time high and a substantial increase in free cash flow of over $100 million. Truist Securities upgraded Woodward's stock target and maintained its Buy rating, reflecting confidence in the company's performance.
In recent developments, Woodward anticipates a decline in Industrial sales by 7% to 11% for fiscal 2025, with volatility noted in the China on-highway market. However, Aerospace segment sales are expected to grow between 6% and 13%, driven by anticipated strong demand in power generation, marine transportation, and smart defense products. Truist Securities has adjusted its fiscal years 2025 and 2026 estimates for Woodward upward, indicating expectations that the company will outperform the broader market consensus for fiscal year 2026.
Despite some sector-specific challenges, Woodward's strategic growth in key areas of its business is expected to drive performance. The company's CEO emphasized Woodward's commitment to innovation and readiness to meet the demands of the energy transition and next-generation aircraft technology. The company projects earnings per share for fiscal 2025 to range from $5.75 to $6.25, reflecting the recent developments in the company's operations.
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