That’s expected to be finalised by the end of September.
KADA is a subsidiary of US firm UTC Aerospace Systems and the deal includes an agreement with UTAS that will designate TAE Aerospace as the only licensed overhaul facility in Australia, New Zealand and much of the region for certain UTAS businesses.
TAE Aerospace chief strategy officer Darren Hutchinson said the opportunity to take on KADA’s capabilities arrived as the company was looking for ways to expand operations.
“It has been part of our growth strategy for a while now to look for interoperability between the platforms we service, particularly between air and land-based platforms, but also marine in the future,” he said.
Hutchinson said that four years ago TAE signed an agreement for total logistics support of the AGT1500 engines in the Army’s Abrams main battle tanks.
“At the time it was considered unusual for an aerospace company to work on a tank engine, but they are both gas turbine engines and operate in a similar way,” he said.
“It’s just that one runs on diesel and the other on jet fuel and we knew the skills were transferable.”
Hutchinson said the transition from air to land-based platforms had proved successful for both TAE Aerospace and Army.
Having local in-country support had delivered significant benefits in responsiveness, cost and turnaround time.
Around half of KADA’s business supports the Army’s fleet of land vehicles, including the M1A1 Abrams, ASLAV, Bushmaster and Hawkei vehicles.
KADA also provides services to a number of aircraft customers, including Qantas and Virgin.
KADA general manager Ray Walton said that both KADA and its UTAS parent welcomed the deal and the benefits it would bring to their customers.
“UTAS decided that KADA would benefit from an in-country business structure and was open to partnering with a company whose operations were closely aligned with the KADA business,” he said.
“It wanted a partner that had the local experience, reputation and capability to support KADA's growth into the future.”
Walton said TAE Aerospace’s reputation as a provider of maintenance repair and overhaul (MRO) was unmatched in the region.
“We know our customers will receive the highest levels of service. We are pleased to be part of a 100 per cent Australian-owned company that has the full backing of the OEM,” he said.
“We look forward to continuing to provide our customers with the quality fire protection and safety systems they expect, backed by responsive service from an in-country provider.”
Hutchinson said that from TAE Aerospace’s perspective, the deal was perfectly matched to its customer base and skill set.
“The KADA capabilities are applicable to military and civilian, air and land-based customers and we have the same mix in our customer base,” he said.
“To service the products effectively you need deep MRO experience as well as the backing of the OEM. We have the largest MRO capability in the region, and a long history of working closely with OEMs under licence arrangements.
“We could see the synergies and the opportunity came along just at the right time for us.”
The deal also expands TAE Aerospace’s national footprint. The company operates from locations in Queensland, South Australia and NSW, and once the deal is finalised, Victoria.
Hutchinson said he welcomed the opportunity to expand the relationship with the Army.
“There is an exciting opportunity for further collaboration between TAE Aerospace and Army and a chance to build on the strong relationship that already exists,” he said.