October 26, 2016 – There are often rumors about B/E Aerospace takeover activity, but few saw this one coming: the interiors giant may itself have been acquired, by Rockwell Collins.
The transaction (US$6.4 billion in cash and stock, plus the assumption of US$1.9 billion in net debt) would combine Rockwell Collins’ capabilities in flight deck avionics, cabin electronics, mission communications, simulation and training, and information management systems with B/E Aerospace’s range of cabin interior products, which include seating, food and beverage preparation and storage equipment, lighting and oxygen systems, and modular galley and lavatory systems for commercial airliners and business jets.
However, a potential snag may come in the form of Louisiana law firm Kahn Swick & Foti, LLC (‘KSF’), which is investigating a class action against the proposed sale terms on the grounds that the consideration and the process that led to them may be adequate, or may undervalue the company.
The acquisition would significantly increase Rockwell Collins’ scale and diversify its product portfolio, customer mix and geographic presence. On a pro forma basis, the deal would see Rockwell Collins have nearly 30,000 employees, US$8.1 billion in revenues and US$1.9 billion in EBITDA for the 12 months ending September 30, 2016.
“This transformational acquisition is consistent with our strategy to accelerate growth and build value through market-leading positions in cockpit and cabin solutions,” said Kelly Ortberg, chairman, president and CEO of Rockwell Collins. “We see tremendous opportunity to better serve our commercial aviation, business jet and military customers through broader offerings.”
Ortberg continued, “B/E Aerospace has a leading position in nearly all the segments it serves and a highly visible, long-cycle backlog. Beyond new aircraft deliveries, its US$12 billion installed base provides a strong flow of aftermarket retrofit opportunities that balances our current cyclical exposure to OEM production rates. Additionally, our combined portfolio uniquely positions us to integrate cabin products, smart network technologies and connectivity solutions to significantly enhance aircraft uptime and airline profitability while improving the experience of passengers and airline personnel.”
B/E Aerospace founder and chairman, Amin Khoury, added, “We feel confident that this combination delivers significant long-term benefits neither company could realize on its own. We look forward to becoming part of Rockwell Collins and leveraging their technology to accelerate our long-term growth as we embark on the next chapter in the company’s history.”