Acquisition of US-Based Specialty Fasteners Business

Diploma PLC, the international value-add distribution group, is pleased to announce the proposed acquisition of Peerless Aerospace Fastener LLC, a distributor of specialty fasteners into the US and European aerospace markets for ca. £236m ($300m). The transaction is expected to complete in the next few weeks following customary regulatory clearances.

Peerless is one of the largest independent value-added distributors of aerospace fasteners with a strong reputation for quality and breadth of product, speed to market, and value-add customer service. This customer proposition has driven a long track record of organic growth of ca. 9% and has enabled ca. 30% operating margin.

The acquisition will add to Diploma’s position in aerospace fasteners, extending its capability from aircraft cabin to airframe, accelerating organic growth by expanding capability in the US with an enhanced product offer and further penetrating key strategic markets in Europe.

Positioning behind structurally growing end markets

Aerospace fasteners represents a ca. $7 billion, highly fragmented addressable market. They are highly specialised products and amongst the most critical components in aircraft manufacturing. An aircraft contains ca. 1 million fasteners, representing up to 5% of total aircraft build value. There is currently a 10+ year backlog for commercial aircraft manufacture, and the combination of new build and ongoing maintenance supports sustainable long-term market growth. Diploma has operated successfully in this space for more than a decade through our Clarendon business, which has delivered sustained double-digit growth, and to which Peerless is highly complementary.

Peerless, which was founded in 1952 and is headquartered in Farmingdale, NY, is an approved supplier to all major aerospace companies globally, primarily serving sub-contractors to the principal OEMs.

Johnny Thomson, Diploma’s Chief Executive said: “Peerless is an excellent acquisition for Diploma, aligned to our strategy of building high quality, scalable businesses for sustainable organic growth. Bill, Don and our new Peerless colleagues have created an exceptional value-add business with a very strong market reputation and I am delighted to welcome them to the Group. We know and like the aerospace fasteners market and Peerless significantly extends our US capabilities and adds scale in Europe. The business is already generating strong performance and there are significant opportunities to enhance returns by working together across our existing businesses. We expect Peerless to extend our track record of acquisitions that drive organic growth at great returns, as part of our focus on continuing to deliver sustainable quality compounding.”