BBA Aviation PLC (LON:BBA) shares rose on Tuesday as the firm announced the acquisition of Firstmark, an aerospace-focused aftermarket service provider, for US$97mln.
The FTSE 250-listed firm said the business – which will become part of BBA's aftermarket services arm, Ontic - is expected to contribute revenue of around US$27mln in its first full year of ownership.
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Firstmark, which is US-based with more than 70 employees, is a provider of highly engineered, proprietary components and subsystems for the aerospace and defence industries.
BBA said the business will be "highly" complementary to Ontic's existing sites in Chatsworth, California, Cheltenham in the UK and Singapore.
Mark Johnstone, BBA’s chief executive commented: "This acquisition fully supports the strategic growth of Ontic by expanding the portfolio of proprietary products on established civil and military aircraft platforms and adding footprint on the US East Coast."
The deal, which is subject to certain governmental and regulatory approvals, is expected to complete late this year.
In early morning trading, BBA shares were 3% higher at 300.60p.
In a note to clients, analysts at Liberum Capital commented: “We had expected Ontic to be the focus of increased business development activity and incremental capital allocation, given the more limited scope to make major investments in Signature Flight Support. Margins and returns at Ontic are attractive and warrant the deployment of additional capital.”
Liberum repeated a ‘buy’ rating and 370p target price on BBA shares.