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GenCorp to Acquire Rocket Unit From Sequa

May 06, 2003|From Bloomberg News

GenCorp Inc., a maker of automotive and aerospace components, agreed Monday to buy Sequa Corp.'s rocket propulsion unit for about $133 million in cash to capture more business in the defense and space industries.

Sequa's Atlantic Research Corp., which makes solid-rocket propulsion systems, gas generators and auxiliary rocket motors, had sales of about $150 million in 2002.

GenCorp, headquartered in Rancho Cordova, Calif., will combine the assets of Gainesville, Va.-based Atlantic Research with those of subsidiary Aerojet General Corp., GenCorp said.

The acquisition will help GenCorp compete in the market for precision strike systems, propulsion and missile defense, Aerojet President Mike Martin said.

GenCorp, which plans to finance the transaction primarily by issuing debt, also will acquire a stake in ARC UK Ltd., the company said. Sequa said proceeds from the sale will improve its finances.

After the transaction, Aerojet will be the second-largest provider in the $1.3-billion solid propulsion market in the U.S., trailing Boeing Co.'s Rocketdyne Propulsion & Power unit, GenCorp spokeswoman Linda Beech Cutler said. She said it was too early to say whether any of Atlantic Research's 900 workers would be let go.

As part of the agreement, Aerojet agreed to provide propellant to Sequa's automobile air bag inflator subsidiary, ARC Automotive.

Shares of GenCorp rose 35 cents to $7.95 on the New York Stock Exchange. Class A shares of New York-based Sequa rose $1.32 to $31.92.

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