Paragon Private Equity

Article by Russell Emmerson - The Advertiser 8/12/09

JOINT Strike Fighter component maker Levett Engineering has broadened its commercial offerings by acquiring precision engineering firm Esstek CNC for an undisclosed sum.

Levett chief executive Paul Levett said the purchase, which was negotiated over 10 months through the financial crisis, would give the combined company a steady cash flow while it geared up for the cash-hungry Joint Strike Fighter contracts.

"It boosts our operability from a commercial side, particularly because Levett has been focused on developing the aerospace market,'' he said.

"It has been a very large wolf taking up cash because of the longevity of the project.
"It is like a glacier moving: you have to be very patient and have a lot of cash to throw at it, but once it gets moving it is very difficult to stop.

"But Esstek is a very good business, a very profitable business. That is not only about commercial sales but the knowledge it brings to the table.''

Esstek will operate as a separate division within Levett Engineering, focusing on precision engineering projects.

Its founder, Terence Esslinger, will be general manager and responsible for growing the firm's national presence.

Levett business development manager Mal Lowen will be active in developing the company's international presence, including boosting its aerospace division which has a $6 million contract to develop airframe components for Lockheed Martin's Joint Strike Fighter.

"With the F35 (Joint Strike Fighter) starting to ramp up and a five-year contract, everything is right to develop that now,'' Mr Levett said.

"There are still other contracts to come, so we will be looking for those.''

Esstek will move from Pooraka to Levett Engineering's Elizabeth South home early next year. No staff will be lost.

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