Key Takeaways
- • Warburg Pincus and Berkshire Partners have agreed to sell Consolidated Precision Products (CPP) to GE Aerospace for $11.75 billion, representing a significant exit for the joint investment sponsors from the aerospace components manufacturer.
- • CPP, a Cleveland-based producer of highly engineered castings and sub-assemblies, operates across 20+ facilities with approximately 6,600 employees and has maintained a 15-year supply relationship with GE Aerospace in commercial and defense aerospace markets.
- • The transaction values CPP at 18 times expected 2027 EBITDA including anticipated synergies, or 26 times standalone EBITDA, reflecting substantial value creation during the sponsors' ownership period.
- • GE Aerospace will fund the $11.75 billion acquisition with $7 billion in cash and new debt financing, projecting positive contributions to adjusted earnings per share and free cash flow in the first year of ownership.
- • GE Aerospace plans to integrate CPP using its Flight Deck operating system to increase manufacturing capacity and accelerate development and production of new engine technologies, leveraging existing operational synergies from the extended supplier relationship.
Summary
Warburg Pincus and Berkshire Partners have reached an agreement to sell Consolidated Precision Products (CPP) to GE Aerospace for $11.75 billion, crystallizing value from their joint investment in the precision castings manufacturer. The transaction represents a major exit for the two private equity sponsors and underscores continued consolidation activity within the aerospace supply chain.
CPP, headquartered in Cleveland, Ohio, is a manufacturer of highly engineered castings and sub-assemblies for commercial aerospace and defense applications. The company operates more than 20 facilities globally with a workforce of approximately 6,600 employees. Founded in 1991, CPP produces castings from super alloys, titanium, aluminum, magnesium, and steel for use in commercial and military aircraft, weapon systems, business jets, helicopters, and industrial gas turbines. Notably, the company has supplied GE Aerospace for over 15 years, creating an established operational relationship that likely facilitated the acquisition.
The transaction valuation reflects robust multiples relative to CPP's financial performance. The deal values the company at approximately 18 times expected 2027 EBITDA when including anticipated synergies, rising to 26 times EBITDA on a standalone basis. GE Aerospace will fund the acquisition through a combination of $7 billion in cash and new debt financing. The aerospace group has indicated the transaction will contribute positively to adjusted earnings per share and free cash flow during its first year of ownership, suggesting management confidence in integration benefits and operational synergies.
Warburg Pincus and Berkshire Partners emphasized their value-creation efforts during the ownership period. Dan Zamlong, managing director at Warburg Pincus, noted the sponsors had transformed CPP into a leading precision casting business through investments in manufacturing operations, technology, quality systems, and workforce development. Blake Gottesman, managing director at Berkshire Partners, similarly highlighted the firms' efforts in strengthening CPP's position within the castings market.
GE Aerospace's integration strategy centers on deployment of its Flight Deck operating system, designed to increase manufacturing capacity and accelerate development and production of new engine technologies. This approach leverages the existing long-term supplier relationship and positions CPP's assets to support GE Aerospace's strategic growth initiatives in commercial and military aerospace markets.
CPP, headquartered in Cleveland, Ohio, is a manufacturer of highly engineered castings and sub-assemblies for commercial aerospace and defense applications. The company operates more than 20 facilities globally with a workforce of approximately 6,600 employees. Founded in 1991, CPP produces castings from super alloys, titanium, aluminum, magnesium, and steel for use in commercial and military aircraft, weapon systems, business jets, helicopters, and industrial gas turbines. Notably, the company has supplied GE Aerospace for over 15 years, creating an established operational relationship that likely facilitated the acquisition.
The transaction valuation reflects robust multiples relative to CPP's financial performance. The deal values the company at approximately 18 times expected 2027 EBITDA when including anticipated synergies, rising to 26 times EBITDA on a standalone basis. GE Aerospace will fund the acquisition through a combination of $7 billion in cash and new debt financing. The aerospace group has indicated the transaction will contribute positively to adjusted earnings per share and free cash flow during its first year of ownership, suggesting management confidence in integration benefits and operational synergies.
Warburg Pincus and Berkshire Partners emphasized their value-creation efforts during the ownership period. Dan Zamlong, managing director at Warburg Pincus, noted the sponsors had transformed CPP into a leading precision casting business through investments in manufacturing operations, technology, quality systems, and workforce development. Blake Gottesman, managing director at Berkshire Partners, similarly highlighted the firms' efforts in strengthening CPP's position within the castings market.
GE Aerospace's integration strategy centers on deployment of its Flight Deck operating system, designed to increase manufacturing capacity and accelerate development and production of new engine technologies. This approach leverages the existing long-term supplier relationship and positions CPP's assets to support GE Aerospace's strategic growth initiatives in commercial and military aerospace markets.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.