Quick Take

GE Aviation (GE) announced that it has acquired OC Robotics for an undisclosed amount.

OC Robotics designs and manufactures commercial snake-arm robots and related control software for hazardous and confined environments.

The addition of robotics technology will help GE Aviation improve its On Wing support business while reducing employee risk, and should continue to differentiate the business unit in the market it operates in.

While the impact on GEs bottom line is small, the acquisition points to smart management willing to adopt robotic technologies to drive efficiencies and remove employees from risky environments.

Target Company

Bristol, UK-based OC was founded in 1997 to develop flexible robotic arms that do not have prominent elbows, allowing them to be more supple and agile in confined spaces.

Management is headed by Managing Director Craig Wilson, who has been with the company since July 2013 and was previously CEO of We Care and Repair, a home repair service for elderly persons.

Below is a brief demo video about the companys snake arm system:

(Source: OCRobotics)

OC says its robots are used in various environments such as nuclear, aerospace, construction, and security. Its customers include the UK Ministry of Defence, Airbus (OTCPK:EADSY), Areva (OTCPK:ARVCY), US Dept. of Defense, Ontario Power Generation, and others.

OC Robotics was capitalized by both private investors and the UK government.

Acquisition Terms and Rationale

Neither company disclosed the amount or terms of the transaction, nor did GE Aviation discuss any changes to financial guidance or file an 8-K that might have provided additional details on the deal.

Accordingly, I presume the transaction was not material to GE Aviations financial condition.

The acquisition rationale is to add OCs snake arm technology to the GE Aviation Service business group, which provides engine repair services to general aviation and commercial aviation customers worldwide.

As Jean Lydon-Rodgers, vice president and general manager of GE Aviation Services stated in the deal announcement,

OC Robotics will play an important role in how we service our customers engines. This acquisition will expand our component repair development capabilities and increase the efficiency of the On Wing Support team as they perform inspections and repairs on our customers engines.

The On Wing support team helps customers avoid flight delays and schedule interruptions by repairing minor engine issues without having to remove the engine. The group performs more than 4,500 rapid repairs annually for more than 250 customers.

The OC Robotics snake arm has a reach of more than 3 meters and a cumulative bend of more than 180 degrees, improving the inspection, fastening, and cleaning processes when it is integrated with tooling.

On Wing repair support will likely become an even greater emphasis for airlines, as fleet usage increases and airlines look to maximize profits while reducing downtime and delays.

It is also part of a growing trend in commercial and industrial business to deploying robotic devices in order to reduce hazards to human operators. The devices increase productivity while reducing risk of injury, so are a win-win for employers and employees.

GE Aviation is just one division of parent company GE, but acquisitions such as that of OC Robotics will serve to position it as a leader in the markets it operates in.

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GE Aviation Acquires OC Robotics For On Wing Engine Servicing - Seeking Alpha