Rockwell Collins will acquire B/E Aerospace for approximately $6.4 billion in cash and stock, plus the assumption of $1.9 billion in net debt.
Under the terms of the agreement, each B/E Aerospace shareowner will receive total consideration of $62.00 per share, comprised of $34.10 per share in cash and $27.90 in shares of Rockwell Collins common stock, subject to a 7.5% collar. This represents a premium of 22.5% to the closing price of B/E Aerospace common stock on Friday, October 21, 2016, Rockwell Collins said in a statement Sunday.
The transaction combines 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.
The acquisition increases Rockwell Collins’ scale and diversifies its product portfolio, customer mix and geographic presence. On a pro forma basis, Rockwell Collins would have nearly 30,000 employees, $8.1 billion in revenues and $1.9 billion in EBITDA for the twelve 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 Chief Executive Officer of Rockwell Collins.
Ortberg continued, “Beyond new aircraft deliveries, its $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.”
Ortberg added, “We expect to generate significant run-rate cost synergies and over $6 billion in free cash flow over the next five years with expected free cash flow conversion of greater than 100 percent. In addition, by leveraging our respective airline and OEM relationships, as well as Rockwell Collins’ business jet dealer network and military aircraft positions, we firmly believe there are revenue synergies that create meaningful upside to our business case.”
B/E Aerospace Founder and Chairman, Amin Khoury, stated, “Our combination with Rockwell Collins represents an excellent outcome for B/E Aerospace’s stockholders, who will receive an immediate premium as well as a substantial equity interest in a strong combined company with a broader range of products, customers, and the combined expertise and resources to create future value.”
The transaction is expected to generate run-rate pre-tax cost synergies of approximately $160 million ($125 million after tax). In addition, Rockwell Collins expects to make certain conforming purchase accounting adjustments resulting in improved pre-tax earnings of approximately $60 to $90 million per year for the first six years after the acquisition. The transaction is expected to be double-digit accretive to earnings per share in the first full fiscal year.
Rockwell Collins has introduced its combat helmet-mounted Integrated Digital Vision System (IDVS) for warfighters. The advanced display system combines real-time mission data with multispectral vision sensors into one view for greater situational awareness
Rockwell Collins has won a second contract for a Deployable Ku-Band Earth Terminal (DKET) SATCOM system from the New Zealand Defence Force as part of the Strategic Bearer Network Phase 1 program. This contract follows an initial award in June 2013 for one DKET dual-antenna, deployable ground station, the company announced Tuesday
Rockwell Collins has been awarded a $31 million contract to provide weapon replaceable assembly repair support of the Aviation Navy/Airborne Radio Communication - 210 version Electronics Protection Radio System and Communications Security System requirements for the US Navy. “Rockwell Collins Inc
Rockwell Collins signed an agreement with Taqnia Aeronautics as well as with the latter's defense and security technology subsidiaries to collaborate for work on military rotary and fixed wing avionics in Saudi Arabia. The partnership will cover work on aircraft assembled, manufactured and updated in Saudi Arabia, the company announced today
IMP Aerospace has selected Rockwell Collins Flight2 integrated avionics system to modernize the cockpit avionics of P-3 Orion Maritime Patrol Aircraft for the Chilean Navy. “Chilean Navy pilots will experience greater situational awareness and communications capabilities with the highly advanced avionics on board these aircraft,” said Alan Prowse, vice president and managing director, Americas and Global Services Business Development for Rockwell Collins said in a statement Tuesday
Rockwell Collins was awarded $27 million to activate a depot capability for the US Navy P-8A Poseidon aircraft HF-121C and miscellaneous radio components. Under contract through 2020, establishing this depot capability creates military jobs, reduces the repair pipeline and improves availability of aircraft
US Army has selected Rockwell Collins to conduct collaborative studies on advanced system designs and integration processes for the Architecture Implementation Process Demonstration (AIPD). As a part of the Joint Multirole (JMR) Mission Systems Architecture Demonstration (MSAD) Science and Technology (S&T) effort, this AIPD is informing standards, processes, tools and architectures for the Future Vertical Lift (FVL) family of systems, the company announced Monday
Russia Begins Production of India's S-400 Systems
Embraer Designates New Multi-mission Medium Aircraft as C-390 Millennium
UAE Firm to Buy 50% Stake in Russian Helicopters’ Subsidiary, VR-Technologies
P&W to Power Russia's VRT500 Helicopters
Bangladesh to Buy Fighter Jets, Apache Gunships & Missile Systems from US
India's Tejas Mk2 in Final Trials
Russia Seeks Customers for 6 Upgraded, Former Indian Air Force Su-30 Fighters
Italian Arms Exports to Pakistan Jump four-folds in 1 year
Several joint production and direct procurement programs could be halted if the US and Europe carry through with their threat...
Sanctions-hit Iran has found ingenious ways to develop military hardware
Artificial Intelligence (AI) is rapidly permeating the defence industry to aid and improve human decision-making
Upgrade of Russias Sukhoi Su-30SM fighters to equip them with armaments, radar, sensors and engines from the more powerful Su-35...
US companies sanctioned by China for supplying weapons to Taiwan may be denied rare earth elements (REEs), which have critical...
While the US F-35 stealth aircraft has become one the fastest selling fighter jets in the world aircraft market, thanks...