Graham Warwick/WASHINGTON DC


Raytheon has agreed to sell its flight simulation business for $160 million to diversified electronics supplier L-3 Communications. The sale is part of a previously announced restructuring aimed at improving struggling US defence electronics giant Raytheon's financial performance.

New York-based L-3 is also buying the Space and Navigation Systems business of the former AlliedSignal, which had to divest the unit to gain approval for its merger with Honeywell. The $55 million deal should be completed next month.

Raytheon says it is selling its Training Devices and Training Services unit - the leading US supplier of military flight simulators - to focus on core activities. The operation, based in Arlington, Texas, and Binghamton, New York, was acquired as part of Raytheon's 1998 merger with Hughes Aircraft.

The business has its roots in the Link simulation company, which was acquired by Canada's CAE in the 1980s when corporate raider Paul Bilzerian broke up the Singer empire. CAE sold Link to Hughes in 1995, which combined it with other training businesses.

L-3 has no involvement in the flight simulation sector, but chairman and chief executive Frank Lanza says the move "is a classic example" of the kind of acquisition L-3 likes to make, and will mean "a significant extension" of its military product offerings.

The Space and Navigation Systems acquisition will complement L-3's growing commercial communications sector and its navigation business, Lanza adds. The unit, based in Teterboro, New Jersey, supplies navigation products for weapon systems and satellites. The division is a supplier to high profile space programmes, including NASA's Space Shuttle, the Hubble Space Telescope and Boeing Delta II, III and IV launch vehicles.

L-3 was formed in 1997 when 10 former Loral and GE businesses were spun off by Lockheed Martin. It embarked on an acquisition spree and last year purchased defence electronics and communications companies Aydin, Interstate Electronics and Microdyne.

Source: Flight International