Teledyne Technologies Inc. has agreed to sell its GA piston engine business, which includes Teledyne Continental Motors and Teledyne Mattituck Services, Inc., to Beijing-based AVIC International Holding Corp. for $186 million in cash.
Headquartered in Mobile, Ala., Continental Motors is a leading manufacturer of FAA-certified piston engines, as well as spare parts and components, used in general aviation aircraft around the world. Continental Motors employs approximately 400 workers in Mobile. It also maintains service centers in Fairhope, Ala., and Mattituck, N.Y. AVIC International officials noted they expect to retain the senior management of Continental Motors and maintain Continental Motors’ global headquarters in Mobile. The acquisition also sets the stage for new hires of skilled workers in Mobile, as international demand for piston-powered aircraft would result in increased engine manufacturing at Continental Motors, company officials said. AVIC International also plans continued investment and upgrades in Continental Motors’ operations, as well as increased research and new product development.
Continental’s new owner is a supplier for big-name companies such as Boeing, Airbus, Honeywell and Snecma, which “will enhance the ability of Continental Motors to compete globally, especially in growing overseas markets, such as China,” according to company officials, who note that Continental’s primary markets today are the U.S. and Europe.
The growing GA market in China makes it one of the world’s largest potential markets for general aviation aircraft, said company officials, who note that, compared to 230,000 GA aircraft in the U.S., China has just 900 — a number that is expected to grow over the next decade, raising demand for FAA-certified piston engines.
AVIC International officials note they were attracted to Continental’s long history in the general aviation market and the company’s reputation for product quality, safety and service.
“I am excited about the opportunity to work with the AVIC International team,” said Rhett Ross, president of Continental Motors. “AVIC International will greatly strengthen Continental Motors’ market access. In addition, increased investment will accelerate new products, such as Continental Motors’ TD-300 diesel engine, which is well-suited to growing regions given international fuel availability. The transaction will allow Continental Motors to continue to be a global leader in the general aviation piston engine industry.”
“The sale of Continental Motors to AVIC International is the right long-term solution for Continental Motors, its workforce and the Gulf Coast community,” said Robert Mehrabian, Chairman, President and Chief Executive Officer of Teledyne. “This sale allows Teledyne to focus on its core businesses, while ensuring a bright future for Continental Motors to build on its long, successful history as a manufacturer of proven piston engines for general aviation aircraft. This will significantly enhance Continental Motors’ opportunity to enter the global market for the sale and service of general aviation piston engines.”
“AVIC International is eager to begin its collaboration with Continental Motors, continuing its reputation as a highly respected maker of FAA-certified piston engines,” said Wu Guangquan, President and CEO, AVIC International. “We are impressed with Continental Motors’ products, employees and facilities. Furthermore, we were attracted to Mobile’s international environment focus and the continually growing concentration of aviation-related international companies in the Mobile area. We look forward to working with current leadership at Continental Motors to expand the Continental Motors’ facility to supply expected growth in the general aviation market worldwide, in particular, to ensure safe and reliable aircraft operations for all customers.”
The transaction is expected to close in the first quarter of 2011. The acquisition of Continental Motors by AVIC International is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act and by the U.S. Government’s Committee on Foreign Investment in the United States (CFIUS), as well as obtaining all relevant Chinese Government Approvals.
Continental Motors and its predecessors produced their first commercial aircraft engine in 1929 and have been in continuous production ever since. The company’s current engines range from 100 to 350 horsepower and are used in small general aviation aircraft for personal and business use. Continental Motors does not produce or use military or defense-related technology.