UPDATE 2-Magellan Aerospace inks $425 mln deal with Rolls-Royce

* Says agreement is for 15 years

* Says first deliveries expected in second half of 2010

* Contract to manufacture mainline shafts and stub shafts

* Shares up as much as 36 pct
(Adds details, analyst’s comments)

By Koustav Samanta

BANGALORE, May 12 (BestGrowthStock) – Canada’s Magellan Aerospace
Corp (MAL.TO: ) signed a 15-year deal worth about $425 million
with British engine-maker Rolls-Royce (RR.L: ) and its German
unit to supply mainline shafts and stub shafts, sending
Magellan’s shares up 36 percent to a new year-high.

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.

Shares of Ontario-based Magellan were up 23 percent at
C$2.72 Wednesday afternoon on the Toronto Stock Exchange. They
touched a high of C$3.01 earlier in the day.

Stock Market Advice

(Reporting by Koustav Samanta; Editing by Anne Pallivathuckal,
Unnikrishnan Nair)

UPDATE 2-Magellan Aerospace inks $425 mln deal with Rolls-Royce