Avionics specialist Rockwell Collins is to buy aeronautical communications company Arinc for $1.39 billion from investor The Carlyle Group.?xml:namespace>
Rockwell Collins describes the acquisition as “a natural fit” and says the transaction, once complete, will mean commercial activity will account for 54% of its business with government operations making up the balance.
The two sides have reached a “definitive agreement” regarding the purchase.
Rockwell Collins says it will combine Arinc’s networks and services with its own avionics and cabin technology systems, and that it will “expand our opportunities beyond the aircraft”.
“It accelerates our strategy to develop comprehensive information management solutions by building on our existing information-enabled products,” says chief executive Kelly Ortberg.
“Arinc’s strong customer base, high customer retention rates and subscription business model will help the company achieve accelerated growth and benefit from greater earnings consistency throughout the commercial aviation business cycle.”
Rockwell Collins says the acquisition will be accretive in terms of earnings per share once transaction and integration costs have been absorbed.
Arinc chief John Belcher says: “Rockwell Collins’ expertise in managing information on board the aircraft, coupled with our innovative and reliable air-to-ground communications services, will be instrumental in providing new integrated information management solutions for our customers.“