aircraft

Rockwell Collins has entered into an agreement to acquire ARINC, a portfolio company of Carlyle Group and communications and information processing solutions provider for the commercial aviation industry, for $1.39bn.

ARINC offers wide range of services to the entire aviation eco-system including pilots, operators, maintenance, passengers, controllers, regulators, security and airport operations.

The company, which is expected to report 2013 revenues of more than $600m, also provides communications and information processing for the rail, industrial security and public safety segments.

The deal will bring together two leading players in the field of aviation information management, combining ARINC’s trusted networks and services with the avionics and cabin technologies developed by Rockwell Collins.

"The deal will bring together two leading players in the field of aviation information management."

This development builds on Rockwell Collins’ information-enabled avionics and cabin systems and ARINC’s aviation networks to provide customers with a wide range of solutions.

In addition, it accelerates Rockwell Collins’ growth in flight services as well as strengthens its overall balance and diversity.

Following the acquisition, the balance of Rockwell Collins’ business will shift to approximately to 54% commercial and 46% government.

Rockwell Collins president and chief executive officer Kelly Ortberg said that this acquisition is a natural fit for Rockwell Collins.

"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," Ortberg said.

"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."

ARINC chairman and chief executive officer John Belcher said: "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, which is subject to the receipt of regulatory approvals and other customary conditions, is expected to be EPS accretive once certain transaction and integration costs have been incurred.

Citi acted as the financial advisor to Rockwell Collins for the transaction.

Image: this deal combines ARINC’s networks and services with Rockwell Collins’ avionics and cabin technologies. Photo: courtesy of Suzanne T.

Defence Technology