Cavotec acquires aviation systems maker

Cavotec MSL Holdings aims to expand its aviation sector's turnover after buying Dabico Group.

California-based Dabico makes aviation fuel and utility supply systems that pop up from below ground level to service aircraft in the hangar or on the tarmac.

Cavotec MSL's chief executive, Ottonel Popesco, said Dabico's fuel systems would enhance Cavotec's existing range of airport servicing systems.

In 2004 the company bought Germany-based Fladung as an entry point into the airports sector. Fladung has a complement of electrical, air, water and fuel in-ground and above-ground airport supply systems.

Dabico - with US and British-based manufacturing businesses - had supplied these systems to aircraft manufacturers, airlines and airports for 40 years.

Popesco said synergies between the two subsidiaries would enhance Cavotec's combined presence in a worldwide market particularly where new airports were being outfitted in China and other parts of Asia, or in Europe where the tarmac was congested.

Cavotec's shares on Thursday closed 10c higher at 410c within their 12-month range of 385c to 545c.

The New Zealand-listed international firm was formed on January 1, 2007, via a merger of Dutch-based Cavotec Group and Mooring Systems, started by Christchurch's Peter Montgomery.

Cavotec corporate finance director John Polatz said in 2007 Dabico generated sales of $US13.2 million ($NZ16.8m) and levels of profitability in line with Cavotec MSL's own targets.

Dabico would be earnings accretive from day one, Polatz said.

"The airport sector has been an increasing piece of our pie of consolidated revenue since we bought Fladung in 2004, and we expect Dabico to accelerate that."

The company would chase revenue growth in line with that seen at Fladung where sales had more than tripled over the last three calendar years.

"We're hoping to get similar expansion with Dabico by doing the same thing, taking a small company with excellent technology ... we have sales companies all over the world that can now start selling Dabico."

With the 40 Dabico staff Cavotec would have close to 600 staff.

Dabico's customers include Boeing, Singapore Airlines, American Airlines and a series of international airports and military customers, including Andrews Air Force Base/Air Force One.

The purchase for an undisclosed sum had been paid for partly through the recent sale of Canadian-based Gantrex and through an Italian bank loan at less than 6 per cent interest.

Cavotec MSL would support Dabico's management team and employees, including US president Bill Fischer and British managing director Gary Matthews under the name of Cavotec Dabico.

- © Fairfax NZ News