Boeing has entered an agreement to acquire KLX, an aviation parts and services provider in an all-cash transaction for $63 per share, approximately $1 billion of net debt, totalling $4.25 billion.
Boeing's acquisition of KLX Inc. will include KLX Inc.'s Aerospace Solutions Group, and is conditional upon the successful divestment and separation of KLX Inc.'s Energy Services Group, the company said in a statement Tuesday.
KLX Inc. capabilities include global parts distribution and supply chain services for aerospace and defense industries worldwide. It will be part of Boeing Global Services and fully integrated with Aviall. KLX Inc. is also a supplier of chemical composites, with this combination broadening the scope of what Aviall can offer to customers in this space.
KLX Inc.'s Aerospace Solutions Group FY2017 revenue was $1.4 billion. Boeing expects the acquisition to have a neutral earnings impact through 2019 and accretion thereafter, with annual cost savings growing to approximately $70 million by 2021 and further improvements realized over time. The transaction will be financed primarily with cash on hand, supplemented with debt.
The completion of the transaction is subject to customary conditions, including regulatory clearance and the approval by a majority of KLX Inc. shareholders. The sale is expected to close by 3Q 2018. The transaction is also subject to the successful divestment and separation of KLX Inc.'s Energy Services Group, Boeing said in a statement.