Gemcor, the fast-growing West Seneca company that makes automated fastening systems for aircraft manufacturers, is being acquired by a California company that specializes in aircraft assembly line systems.
Gemcor, which has about 90 employees at its West Seneca facility, has increased its revenues more than sixfold since 2004. Its fastening systems have been used on planes such as the Boeing 737 and 777, the Airbus A321 and the Bombardier C-Series commercial jets.
“We think there’s a lot of synergy between the companies, people-wise and technology-wise,” said Tim Shumate, vice president for marketing and business development at Ascent Aerospace, the Santa Ana, Calif.-based company that is acquiring Gemcor.
Ascent said the acquisition will bolster its automated assembly capabilities. Gemcor’s systems are mainly used in the subassembly of aircraft wings, fuselages and various housings that hold an aircraft’s engine, fuel or other equipment. Gemcor executives said in July that the company had a record backlog of orders. The company gets 50 percent to 60 percent of its sales from foreign markets.
Shumate said Tuesday that Ascent has no immediate plans for changes at Gemcor’s West Seneca operations.
“Ascent intends to continue to run it as a stand-alone business with the added benefit that Gemcor will have access to the larger talent pool of Ascent,” the company said in a statement.
The deal is expected to close by the end of March.
“While we will be growing Gemcor at their New York facility, we will also be using their worldwide base of machine installations to expand Ascent’s global footprint and strengthen our customer service,” said Brian Williams, Ascent’s chief executive officer. “We also expect significant synergy in the areas of controls engineering and robotics.”
Being part of Ascent will give Gemcor access to additional technical and engineering resources, as well as greater internal investment opportunities, said Bill Mangus, Gemcor’s president and CEO. That could help Gemcor add to its product offerings in the future.
The deal also allows Gemcor’s owners to cash out and realize a profit from the company’s decade-long growth. Rand Capital, a Buffalo venture capital firm that first invested in Gemcor in 2004 and now owns a 31 percent stake in the company, said it expects to turn its $625,000 investment in Gemcor into a $13.4 million profit.
While the terms of the acquisition were not disclosed, the deal could be worth a total of around $45 million, based on the valuation of Rand’s stake in Gemcor.
The Gemcor profits will leave Rand with more than $18 million in cash for new investments. Gemcor was Rand’s biggest holding in its portfolio of 32 businesses, accounting for 27 percent of its total assets.
“We plan to put the proceeds from the sale back to work by investing in emerging growth companies with strong management teams,” said Pete Grum, Rand’s president. “We are currently exploring a strong pipeline of opportunities in the venture capital market.”