Wellington loses a business

Rockwell Collins is acquiring B/E Aerospace

B/E Aerospace, which makes airplane interiors, is being acquired by airline supplier Rockwell Collins.

Wellington-based airplane interior maker B/E Aerospace has agreed to be acquired by Iowa airline supplier Rockwell Collins for $6.4 billion, the companies have announced.

As a result, B/E Aerospace’s Wellington headquarters will be eliminated — as part of several cost-saving measures resulting from combining the businesses, said Kelly Ortberg, chairman, president and CEO of Rockwell Collins, during a conference call on Monday.

B/E Aerospace has about 10,000 employees worldwide, though only a small percentage are located at its headquarters in Wellington. In early October, the company notified state and local officials that it would close its manufacturing operation in Medley in Miami-Dade County and lay off 53 workers.

“Over time, B/E Aerospace corporate functions will be consolidated with Rockwell Collins’ headquarters in Cedar Rapids, Iowa. However, overall, we expect minimal impact to B/E Aerospace locations in Florida,” said Rockwell Collins spokeswoman Pamela Tvrdy-Cleary, adding that more details would be available after the transaction closes.

Kelly Smallridge, president of the Business Development Board of Palm Beach County, said the B/E Aerospace headquarters is part of an aviation-aerospace-engineering sector that includes more than 600 companies and 13,000 employees in Palm Beach County — and it is always mentioned by the Business Development Board when trying to attract new employers. “The village of Wellington has always bragged about them,” she said.

As the county’s top economic development official, Smallridge said she would like to see them keep some employees in Wellington and plans to contact Rockwell Collins.

“While B/E [Aerospace’s] operations are worldwide, of course the impact of losing its local headquarters in Wellington is a loss for the county and the community,” said Jim Barnes, assistant village manager of Wellington.

Ortberg told analysts that he doesn’t expect any regulatory challenges to the acquisition, but if B/E Aerospace’s board were to change its recommendation, it would have to pay a $200 million breakup fee. Rockwell Collins’ breakup fee would be $300 million, he said.

Stockholders of both companies still have to approve the acquisition, but Ortberg said he expects the transaction to close next spring, with B/E Aerospace becoming a segment of Rockwell Collins.

Combined, the companies have $8.1 billion in revenues, based on the latest numbers, said Patrick Allen, chief financial officer of Rockwell Collins.

The companies said the deal combines Rockwell Collins’ capabilities in flight deck avionics, cabin electronics, mission communications, simulation and training, and information management systems with B/E Aerospace’s 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.

“We feel confident that this combination delivers significant long-term benefits neither company could realize on its own,” said B/E Aerospace Founder and Chairman Amin Khoury, in a news release. Khoury said the company he built, from $3 million in 1987 to currently $3 billion in revenues, will be in “competent hands” as he retires.

Rockwell Collins, which also is a supplier to the airline industry, said it will acquire B/E Aerospace for $6.4 billion in cash and stock and assume $1.9 billion in debt.