Aerospace Contractor Leach Being Sold for $145 Million
By SHERRI CRUZ
After a 10-year courtship, Bellevue, Wash.-based Esterline Technologies Corp. is buying Leach International Corp., a Buena Park-based maker of electronics for the aerospace industry, for $145 million.
The deal, set to close next month, will make Leach an Esterline subsidiary. Technically, Esterline is buying Leach Holding Corp. of Connecticut, a holding company for Leach International.
“This company fits our strategy like a glove,” said Robert Cremin, Esterline’s chief executive, in a recent conference call.
Esterline makes commercial and military electronics, displays, sensors and other products. It counts yearly sales of more than $600 million and a market value of $630 million as of last week.
Leach is privately held and counts yearly sales of $120 million.
It has 400 workers in Orange County and 1,000 companywide.
Esterline doesn’t plan to close any Leach facilities, change management or lay off workers, company spokesman Brian Keogh said.
Robert Sires, president of Leach Holding, was out of the country last week and couldn’t be reached for comment.
“We like the management,” Esterline’s Cremin said. “We don’t buy fixer uppers.”
The buy is Esterline’s largest yet. About 80% of Esterline’s revenue is from defense and space contractors.
The majority of Leach’s operations are related to aerospace. It also has a medical device business, which makes up about 20% of its revenue.
Esterline officials said the company couldn’t disclose Leach’s profit numbers until the transaction closes.
They did say Leach made money before and after the 2001 terrorist attacks.
“Leach is a healthy, profitable business,” Cremin said. “We’ve been trying to purchase Leach for well over 10 years. We finally got them to the altar.”
At Leach’s 105,000-square-foot Buena Park plant on Orangethorpe Avenue, the company makes relays and switching devices that are used on aircraft. Leach’s devices are used on virtually all commercial aircraft from Boeing Co. and Airbus SAS, according to Esterline.
Esterline officials said Leach likely will start using “lean manufacturing” at its plants, which in many cases leads to layoffs.
But that doesn’t mean cuts for Leach, according to Keogh.
“There is no plan for us to go in and slash and burn,” he said. “Lean for us is an opportunity to grow.”
Leach has seven plants, including factories in Mexico, France and China. The Germany and Buena Park facilities are considered primary plants. Leach has two plants in France, where it employs about 400.
Leach’s medical business is in Germany, where it has 27 engineers. There it designs and makes home healthcare devices such as glucose level measuring devices. Esterline plans to hold on to that business.
Leach’s ownership, family-run G.L. Ohrstrom & Co., had been reluctant to sell the company in the past.
With private companies, “it’s their baby,” Keogh said.
“They don’t want some big company to come in and dismantle it. We have tremendous patience,” he said.
Val Leach, who was a radio operator in the Navy during World War I, founded the company in 1919. He invented an automatic antenna switch and power relay, the company’s first product.
After Leach died in 1941, the company went through a number of owners until its current owners acquired it in 1949.
By 1992, Leach moved all U.S. manufacturing to Buena Park.
