Magellan Aerospace Inks $425M Deal with Rolls-Royce

Canada's Magellan Aerospace Corp, signed a 15-year deal worth about $425 million with British engine-maker Rolls-Royce and its German unit to supply mainline shafts and stub shafts.

The first deliveries are expected to be made in the second half of 2010, Magellan said in a statement.

"They are poised to take profitable advantage of the increase in aircraft deliveries, both on the commercial and military side of the businesses because they have good exposure on Boeing 787, Airbus A350 and Joint Strike Fighter aircrafts," Paradigm Capital analyst Marvin Wolff told Reuters.

The work will be performed at Magellan's Middleton Aerospace facility in Haverhill, Massachusetts.

"Magellan will utilize its existing equipment for initial production, but will expand its manufacturing footprint at the Haverhill facility to accommodate the new equipment and processes required to support full-scale production for the program," the company said in a statement.

Analyst Wolff, who said the contract is "very good" for the company, said Magellan had cut costs and streamlined operations in the last couple of quarters.

He has a "buy" rating on Magellan's stock.

Magellan designs, engineers, and manufactures aircraft parts and engines for civil and military markets. It operates in Canada, the United States, the United Kingdom and India.