Thursday, 8 February 2007

AeroMechanical And Meggitt Go Big Game Hunting!

AMA has finalized a long-term agreement with Meggitt, PLC. (MGGT.L). The two companies will integrate AMS’s products with Meggitt’s monitoring systems, and cooperatively market the offering to airframe and engine manufacturers (Boeing, Airbus etc.), as well as airlines and other end users.

The combined product will enable timely, fully automated delivery of critical onboard diagnostic information to operators and aircraft manufacturers, which will improve dispatch reliability, optimize logistics, and minimize maintenance costs. Click here to read the release.
Of interest to investors, Richard Hayden, Senior Vice President of Meggitt stated: “Meggitt expects great things to come as a result of this agreement. This [agreement] puts Meggitt at the forefront of automated delivery of data and immediately actionable information from our superior lineup of condition monitoring and navigation instrument systems.”

Ask yourself, why would a mammoth worldwide corporation want to sign an agreement with a small company like AMS? In our opinion, logic dictates that there must be something in it for Meggitt! According to Hayden, it “puts Meggitt at the forefront…”. Exciting? We think so. We also know that large companies usually look for projects that can produce significant returns and are not interested in arrangements that will produce marginal returns.

Astute investors will notice that AMS announced a relationship with Meggitt during the summer of 2006. Click here to read. The initial relationship had a trial period which has now concluded. The new agreement is long-term in nature and included an undisclosed amount of cash paid to AMS. Although the amount wasn’t disclosed, we encourage investors to use their keen wit when viewing the Q1 financials (which unfortunately will not be released until May).