Skandia Seeks Strategic Acquisition in the Interiors Products and Services Sector

Two years after selling a majority stake to investment firm Graycliff Partners of New York City, Skandia, which provides seating materials, flammability testing and other interiors products and services to the business aviation industry, is in expansion mode. “We’re looking to grow,” said Jarod Triplett, v-p of the Dawson Junction, Ill.-based company. “I can see us doubling in size over the next five years, with some targeted market recovery as well as the [addition] of some new product lines and services to our portfolio.”

Skandia currently performs about 70 percent of all aviation flammability testing in the world, with its main focus on the business aviation market. “We are the primary lab of every business jet manufacturer out there now,” Triplett said. On the seating side, the company is the exclusive supplier to all but the airliner market of DAX foam, now used in some 95 percent of business jet seats, a product that “has become our bread and butter over the past 25 years,” he said.

In recent years Skandia has experienced 12 to 14 percent organic growth, according to Triplett, and the company expects to maintain that rate over the next five years.

Founded in 1983 as a business jet interior completions provider, the company took off soon after when the FAA implemented new flammability standards. “Nobody knew how to do oil burn tests other than the FAA,” Triplett explained. Company founder Tim Theden built test equipment designed according to the FAA’s fire test handbook specifications, to test materials the company was using in aircraft interiors work, and soon Skandia developed a thriving flammability testing business.

Another break came in the late 1980s when Theden gained from DAX’s manufacturer, NCFI Polyurethanes of Mt. Airy, N.C, exclusive rights to the non-airline aviation market. Skandia currently provides DAX foam alone or foam and fabricated foam seat parts for 26 different business aircraft programs. The foam is also used in divans, headliners and side paneling.

Beyond Flammability Testing

Today Skandia has four divisions: flammability testing and engineering; DAX distribution; upholstery supplies; and turnkey seat solutions. In addition to testing services, the flammability testing and engineering division provides engineering services to help customers meet material flammability standards and improve the comfort and anti-flammability properties of their products.

The company has four DERs and two DARs on staff to develop the engineering and tests for clients’ products. A year ago, aiming “to drive down cost and weight, but enhance quality,” the company created an R&D team of four headed by a new v-p of engineering to study the interactions of various seating materials. This spring, Skandia opened a new smoke and heat release testing facility. Triplett said the new facility was created initially at the direction of Airbus, to meet that OEM’s testing needs, but that it’s “necessary that we have that capability” in any event for future heat release, smoke emission and toxicity testing. (Skandia recently received Airbus authorization to provide ongoing flammability testing and certification services.)

Skandia’s DAX distribution business appears secure. The company’s exclusive evergreen agreement remains in place as long as Skandia hits an annual sales quota threshold. To ensure adequate supplies for any situation, the company keeps a nine-month supply in inventory, as it continues to update and innovate the product in conjunction with the manufacturer. Triplett notes that with today’s business jets flying farther than ever, seat comfort is even more important. Last fall Skandia introduced a new-generation DAX VXS Visco-Elastic foam, a high-density product 25 to 50 percent lighter per cubic foot than other visco-elastic foams, and whose anti-flammability performance meets current FAR 25.853(a) and 25.853(c) regulations.

The upholstery supplies division provides seat covering and a variety of other materials, such as soundproofing and soundproofing kits. Soundproofing material is used primarily for head-of-state completions, owing to the high cost and the extra weight the installations add to an aircraft interior project. But Skandia’s soundproofing kits cover 82 aircraft models from piston-engine aircraft to Boeing 747s and can dampen sound by three to five dB, Triplett said, or about 50 percent on average. Among other projects, the company is providing soundproofing materials and installation consulting for two head-of-state 787 completions now under way at GDC Technics (formerly Gore Design Completions) in Austin, Texas. Although it retains its focus on business aviation, Skandia has introduced an expanded array of seat repair and refurbishing options for the regional airline industry.

Skandia’s turnkey seat solution division handles design and engineering, testing and construction of seats for OEMs. “Just lock them into the seat rails,” Triplett said of the ready-to-install seating. The division launched by providing seats for the Bombardier Learjet 40 and 45, later produced the seating for the Learjet 60 and has now been awarded the seat contract for the Learjet 70 and 75. This year the company celebrates its 15th anniversary as Learjet’s primary seating and interior integrator. “The services they provide for us today are unique in the industry,” said Jonathan Harlan, supply chain manager at Learjet. “We send them the individual aircraft’s design specifications and they purchase the seat frames, restraints and all the leather for the upholstery and interior.”

However, careful to avoid stepping on the toes of refurbishment centers and customers such as Zodiac Aerospace and Iacobucci HF Aerospace, which use DAX in the seats they manufacture, Skandia isn’t looking to expand this division, said Triplett. (One of Skandia’s few competitors in the seating materials supply space is Metzeler Schaum of Memmingen, Germany.) Nonetheless, Triplett said the turnkey seat construction work “is helpful in keeping people on top of changes in materials and how they need to be used more efficiently.”

To keep Skandia’s growth on track, in August the company brought James Barnes aboard as executive v-p and CFO, charged with managing Skandia’s aircraft interiors and engineering business, and assisting the company in its search for a strategic acquisition. “While not without risks, acquisitions can be an effective way to accelerate growth,” said Barnes.