When Crissair of Palmdale began looking for more space recently, it found a good plant in Valencia – and ended up buying the company that was already there. Now Crissair, which makes aerospace components, has begun its move to the 70,000 square-foot building also occupied by Canyon Engineering Products Inc., a relocation that is expected to take 18 months. Both Crissair and Canyon Engineering are owned by Esco Technologies Inc., a St. Louis manufacturer for the utility, industrial and aerospace industries. Esco acquired Canyon Engineering in June and while adding the company brings a few pennies to earnings it was the building at 28909 Avenue Williams that was the real prize, said Gary E. Muenster, executive vice president and chief financial officer of Esco. “We were in the market for a newer building for Crissair in a more suitable location and Canyon brought that to us as well as a nice business platform that is consistent with what we manufacture at Crissair,” Muenster said. Independent of the search for a new building, Esco was in talks to purchase Canyon Engineering for its product line and because it shares customers and suppliers with other Esco-owned companies, Muenster added. Terms of the deal for Canyon Engineering were not disclosed and Muenster would not say how much Esco paid for the building. Wedbush Securities analyst Craig Irwin put the purchase of Canyon Engineering in the range of $10 million. “It is not a material acquisition for Esco but it is an interesting acquisition in that Canyon was a supplier to Crissair,” Irwin said. Crissair and Canyon Engineering are part of Esco’s filtration business segment. Both companies make valves, pumps and other devices to control the flow of fuel in commercial and military aircraft. Esco is growing the filtration business both organically and through acquisitions, Muenster said. Because of that strategy there were no immediate plans to reduce staff during the consolidation of Crissair and Canyon. Irwin, the analyst, characterized Esco as an overall well-managed company that mainly provides components to large utilities including Southern California Gas Co., a subsidiary of Sempra Energy in San Diego. The filtration segment, while smaller than the utility work, shows consistent growth and receives the appropriate attention from management, Irwin said. For the second quarter ending March 31, Esco reported net income of $1.8 million (7 cents a share) compared with $15.4 million (57 cents) in the same period a year earlier. Revenue fell 4 percent to $166 million. The filtration division is almost a third of Esco’s business. It brought in revenue of $53.6 million in the second quarter, a 9.6 percent increase from the second quarter a year earlier. Maximizing profitability Crissair was founded in 1954 and moved to the Antelope Valley from El Segundo in the 1970s when land was plentiful and cheap. The company was operated by founder Robert Stockberger and then his daughter Linda Bradley until Esco acquired it in 2010. Speaking at an Oppenheimer & Co. Inc. investors conference in May 2012, Muenster said that at the time of the acquisition, Crissair had about 12.5 percent in operating income. A year and a half later it had 18 percent, an increase Muenster attributed to cost cutting, changes in pricing and greater use of the existing supply chain. “So we paid a nice price for that, but we have maximized the profitability here in the first two years and we expect that to continue,” Muenster said. Canyon Engineering was founded in 1978 and moved several times before settling in the state-of-the-art building in Valencia. The company has annual revenues of about $12 million, according to an Esco press release. Muenster would not disclose how many employees work at Canyon and Crissair, although Rosalind Wayman, a board member of the Santa Clarita Valley Economic Development Corp., said Crissair has 175 workers. Moving to Valencia puts Crissair closer to an educated and trained workforce in the Santa Clarita Valley if the company hires in the future, Wayman said. “We are excited to add them to the existing aerospace companies that are here,” she added. Crissair will be the legal entity owner of Canyon but both trade names will remain in use because of their strong brand connections, Muenster said. The move to Palmdale to Valencia will take about 18 months and with a cost to Esco of several hundred-thousand dollars, Muenster said. Crissair vacates an approximate 29,200 square-foot building at 38905 10th St. East that the company had outgrown. There may be some rehab work to the building to prepare it for a new tenant, said Dave Walter, economic development manager for the city of Palmdale. “It hurts,” Walter said of Crissair’s exit from Palmdale. “We would prefer to see them stay in place.” Irwin, of Wedbush, called the consolidation into a single location a homerun and a winner for all involved. “It is more employee-friendly, it solves the issue of being out of space in Palmdale and allows the former owner of Canyon to make a financial return on the business he developed and be properly compensated by fully utilizing the whole building,” Irwin said.
Aerospace Company Lands Office, Sister Business
