We Study Billionaires - The Investor’s Podcast Network TIP738: Heico: The Quiet Aerospace Compounder
48 snips
Jul 18, 2025 Discover the incredible journey of Heico, which transformed from a struggling parts supplier into a $38 billion aerospace leader. The Mendelson family's strategic capital allocation and regulatory mastery created a powerful competitive edge. Heico's unique acquisition playbook mirrors Berkshire Hathaway's approach, emphasizing long-term value. Explore how their customer loyalty strategy fosters predictable revenue streams, while economic downturns actually benefit their business model. This episode is packed with insights for investors and entrepreneurs on building a resilient, durable business.
AI Snips
Chapters
Books
Transcript
Episode notes
Mendelsons' Transformational Acquisition
- The Mendelson family acquired Heico in 1990 with $3 million and turned it from a struggling parts supplier into a $38 billion market cap company.
- Eric and Victor Mendelson became young CEOs at 24 and 22 and led the company to an outstanding compounding success.
FAA Approval as Competitive Moat
- Heico exploits FAA's strict approval process as a moat making entry difficult for competitors.
- Reverse engineering OEM parts with FAA approval lets Heico offer cost-effective alternatives and dominate the aftermarket.
Lufthansa Partnership Launch
- In 1997, Heico formed a partnership with Lufthansa Airlines who took a 20% stake.
- This boosted credibility and accelerated FAA approval for new parts, helping Heico lead the PMA industry.
