13 March 2002

$1 billion opportunity as Boeing selects Smiths Aerospace for 767 tanker

Development of the systems will commence immediately with initial deliveries on aircraft scheduled for delivery to Italy and Japan from 2005. Boeing is currently in negotiations with the United States Air Force for the lease of 100 aircraft and is part of a consortium bidding to provide the Future Strategic Tanker Aircraft for the UK Ministry of Defence.

Expressing his pleasure at the Boeing selection, Keith Butler-Wheelhouse, Chief Executive of Smiths Group, said: The combination of TIs aerostructures capability and Smiths resources have produced precisely the type of new business opportunity we envisaged from the merger.

Key to this success was the integrated system offered by Smiths Aerospace. The technology for the hose unit, the major part of the system, has been acquired through the agreement for Smiths to purchase Able Corporation. Smiths has agreed a price of $17.5m in cash for Able plus up to $10m deferred over 5 years.

In addition to its microprocessor-based refuelling hose systems, Able makes pumps, electric motors and fluid control products for aircraft and military land vehicles. It has annual sales of $12 million which will grow considerably as a result of the 767 tanker programme. Able has 65 employees and is based near Los Angeles, California.

We are proud to support Boeing on this important and valuable programme, commented John Ferrie, Group Managing Director. This selection is indicative of the value customers place on the integrated engineering capabilities we provide. Our acquisition of Able further strengthens our existing fuels business.

Smiths Aerospace has extensive experience in both military and commercial fuel systems and structural components. The programme combines a breadth of capabilities of Smiths Aerospace in programme management and systems/software engineering from its Michigan facility, manufacturing from Florida, extensive structural component engineering and manufacturing from its aero structures business in Southampton, and primary hose and drogue in-flight refuelling components from Able in California.

The Smiths Aerospace hydraulically powered hose and drogue refuelling system contains the latest technology which provides significantly improved response performance. In addition, the system incorporates numerous features that substantially enhance system reliability and maintainability.

This latest selection reinforces Smiths Aerospaces position as a preferred supplier to Boeing. Smiths Aerospace was previously selected for the 767 GTTA mission control system using a derivative of the companys advanced commercial flight management system in service on Boeing 737 aircraft. The in-air refuelling system interfaces with the mission control system to provide Boeings customers with an integrated solution to accomplish the aircrafts primary mission. Late last year, US Congress granted the Air Force the authority to negotiate a lease for up to 100 767 Tankers as the first step in replacing its Eisenhower-era KC-135 fleet. Negotiations are expected to be completed this summer.

ENDS