B/E Aerospace considers possible sale or merger

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Interiors and consumables specialist B/E Aerospace has postponed its 5 May investor meeting as it considers being sold to or merging with another company.

The Wellington, Florida-based firm is considering “strategic alternatives” that could include a sale or merger of the firm or “sale, spin-off or other separation of selected businesses” within B/E, says the company in a press announcement.

B/E has yet to make a decision about these options and has not set a timeframe for when it would do so, it says. The company is split into three segments focusing on consumables management, seating and interiors products for commercial aviation and business jet furnishings.

“We are surprised by the announcement, considering the strong [first quarter] results BEAV recently posted and its recent order success,” says Canaccord Genuity analyst Ken Herbert in a 5 May research note. He adds: “We expect this announcement will be viewed favourably by investors, but it is too early to speculate on potential merger partners or companies that would want to acquire all or part of BEAV.”

B/E Aerospace reported operating earnings of $185.2 million in the first quarter, or a 20.6% increase year-over-year when excluding $2.2 million in acquisition costs. The costs are related to the firm acquiring or intending to acquire a number of businesses, according to B/E Aerospace's first quarter earnings release. The company garnered $1.1 billion in bookings in the first three months of 2014--a quarterly record.

In March, B/E announced it had won $600 million in contracts from seven international airlines for premium and economy seating installations. Those projects include new and retrofit seating installations for the Boeing 777 and 787, as well as the Airbus A350, A380 and A319.