Rockwell Collins announced it has reached a definitive agreement to acquire ARINC Incorporated, a portfolio company of The Carlyle Group, for $1.39 billion.
“Strategically, this acquisition is a natural fit for Rockwell Collins,” said Kelly Ortberg, Rockwell Collins CEO and president. “It accelerates our strategy to develop comprehensive information management solutions by building on our existing information-enabled products and systems and ARINC’s ground–based networks and services to further expand our opportunities beyond the aircraft.”
ARINC broadly touches the entire aviation eco-system, including pilots, operators, maintenance, passengers, controllers, regulators, security, and airport operations. In addition, ARINC provides communications and information processing for the rail, industrial security and public safety segments. Their 2013 revenues are expected to be in excess of $600 million. When completed, the acquisition will shift the balance of Rockwell Collins’ business to approximately 54 percent commercial and 46 percent government.
“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,” added Ortberg.
“We’re excited to be joining a company who shares our vision and focus on providing trusted solutions for our customers,” said ARINC chairman and CEO John Belcher. “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.“
The transaction is expected to close upon receipt of regulatory approvals and other customary conditions. It is expected to be EPS accretive once certain transaction and integration costs have been incurred.