Rockwell Collins bets on smart jets with $6.4b B/E takeover
The acquisition of B/E Aerospace is the largest in the avionics company’s history
Rockwell Collins Inc., with its $6.4 billion (Dh23.51 billion) takeover of B/E Aerospace Inc., is betting big that airplanes will get smarter as everything from lie-flat seats to toilet valves flash data in real time to airline crews and maintenance workers on the ground.
The acquisition is the largest in the avionics company’s 83year history, eclipsing its $1.39 billion takeover of Arinc Inc. in 2013. That deal, just 11 days after Kelly Ortberg was named chief executive officer, gave Rockwell Collins new ways to pipe data into airplanes. With B/E Aerospace, Ortberg gains the largest equipment supplier for aircraft cabins — and the chance to provide reams of new information to airline operators.
The transaction vastly broadens a product portfolio that has been centred on aircraft communications and computing equipment since Cedar Rapids, Iowa-based company was spun out of Rockwell International in 2001. The deal, which is slated to close in early 2017, is the latest in a spate of mergers involving suppliers to Boeing Co. and Airbus Group SE, which are squeezing suppliers as they brace for slower growth following a decade-long sales cycle.
23% premium
B/E Aerospace investors will get $34.10 in cash and $27.90 in shares of Rockwell Collins common stock, for a total consideration of $62 a share, the companies said in a statement Sunday. That’s a 23 per cent premium over B/E Aerospace’s closing price on Friday. With the assumption of $1.9 billion of debt, the purchase comes to $8.3 billion, according to the statement.
B/E Aerospace is the largest supplier of aircraft cabin equipment, ranging from modular lavatories to luxurious seats as expensive as a Ferrari. On a proforma basis, the combined manufacturer would have had almost 30,000 employees, $8.1 billion in revenue and $1.9 billion in earnings before interest, taxes, debt and amortisation for the 12 months ended September 30, 2016, according to the statement.