Esterline Technologies Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of aerospace and defense parts supplier Esterline Technologies (NYSE: ESL  ) rose as much as 12% today on speculation that it could be a takeover target.

So what: According to the Daily Mail, a London newspaper, Esterline could be attracting the attention of BAE Systems (OTC: BAESY), Boeing (NYSE: BA  ) , or Lockheed Martin (NYSE: LMT  ) as a potential buyout candidate. No specific sources were cited by the newspaper.

Now what: Right now, the thing to remember is that this is all speculation at this point. Boeing would make a solid choice with it and Esterline's large presence in my home city of Seattle. Lockheed is looking for other avenues of growth with the U.S. government cutting billions out of its budget, and Esterline may be a good fit there as well. As for BAE Systems, I'm not as certain it would make the optimal purchaser and, according to yesterday's report from The Guardian, BAE may be entertaining an offer of its own. Again, more unconfirmed rumors leading the trade.

As of now I'm happy taking a wait-and-see approach here; why chase Esterline higher?

Craving more input? Start by adding Esterline Technologies to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On March 24, 2012, at 9:44 AM, jamyang wrote:

    I think it is unlikely that Boeing would be interested to acquire Esterline. Esterline is a fantastic company with great performance, much undervalued in the Aerospace sector. Boeing has never shown itself able to successfully manage smaller, more nimble companies in the components industry, and only recently sold off its holdings in electronics systems to BAE Systems. So why would it want to get back in now, with a much more diversified company such as ESL? More likely buyers would be BAE or LMT. Possibly even EADS North America?

  • Report this Comment On March 26, 2012, at 11:33 AM, TheGhost206 wrote:

    Is there a timeframe on a potential buyout? Do these deals take years or months? Cheers!

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