Business

May 2, 2018
 

Boeing to acquire KLX Inc. to enhance services business growth

Boeing announced May 1 it has entered a definitive agreement to acquire KLX Inc. to enhance its growing services business.

The agreement comprises an all-cash transaction for $63 per share and the assumption of approximately $1.0 billion of net debt, totaling $4.25 billion.

Boeing’s acquisition of KLX Inc. will include KLX Inc.’s Aerospace Solutions Group, and is conditional upon the successful divestment and separation of KLX Inc.’s Energy Services Group.

KLX Inc. is a major independent provider of aviation parts and services in the aerospace industry. Its capabilities include global parts distribution and supply chain services for aerospace and defense industries worldwide. KLX Inc. will be part of Boeing Global Services and fully integrated with Aviall. 

KLX Inc. is also a leading supplier of chemical composites, with this combination broadening the scope of what Aviall can offer to customers in this space.

“This acquisition is the next step in our services growth strategy, with a clear opportunity to profitably grow our business and better serve our customers in a $2.6 trillion, 10-year services market,” said Stan Deal, president and CEO of Boeing Global Services. “By combining the talent and product offerings of Aviall and KLX Inc., we will provide a one-stop-shop that will benefit our supply chain and our various customers in a meaningful way.”

KLX Inc.’s Aerospace Solutions Group employees and operations will be integrated with Aviall, providing a clear path for the business to accelerate growth. The Miami facilities are expected to continue to remain the principal operating location.

“Our customers have long desired a supplier who could offer essentially 100 percent of their requirements for fasteners, consumables and expendables. The combination of Aviall and KLX Aerospace facilitates the broadest scope of parts and products to support all customer fleet types for the commercial, military and defense and business and general aviation markets,” said Amin Khoury, KLX Chairman and CEO. “This business combination will enable us to deliver industry-leading value-added service solutions for our customers, and outstanding growth opportunities for our suppliers.”

KLX Inc.’s Aerospace Solutions Group fiscal 2017 revenue was $1.4 billion. Boeing expects the acquisition to have a neutral earnings impact through 2019 and accretion thereafter, with annual cost savings growing to approximately $70 million by 2021 and further improvements realized over time. The transaction will be financed primarily with cash on hand, supplemented with debt.

The completion of the transaction is subject to customary conditions, including regulatory clearance and the approval by a majority of KLX Inc. shareholders. The sale is expected to close by 3Q 2018. The transaction is also subject to the successful divestment and separation of KLX Inc.’s Energy Services Group.

With approximately 2,000 employees, KLX Inc.’s Aerospace Solutions Group is headquartered in Miami with customer service centers located in more than 15 countries. As a major independent provider of new aviation parts and related aftermarket services, KLX Inc. markets and distributes products for approximately 2,400 manufacturers and offers approximately 1 million catalog items.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines – November 14, 2018

News Why victory isn’t goal in Afghanistan – When Lt. Gen. David Petraeus returned from an inspection tour of Afghanistan in 2005 to brief then Secretary of Defense Donald Rumsfeld, he began with a simple image.     Business One company wants to help herd U.S. Army robots – A firm out of Boston is...
 
 

News Briefs – November 14, 2018

Navy warplane down in 2nd crash from U.S. carrier in month A U.S. Navy warplane belonging to the aircraft career USS Ronald Reagan has crashed into the sea northeast of the Philippines, but its two aviators were safely rescued. The Navy’s 7th Fleet said in a statement that the F/A-18 Hornet had a mechanical problem...
 
 

Pilot dead, one hurt in crash at Texas AF base

One pilot is dead, and one was transferred to Val Verde Regional Medical Center when an Air Force T-38C Talon assigned to Laughlin Air Force Base, Texas, crashed at approximately 7:40 p.m., Nov. 13 on base. Laughlin emergency responders are on scene. The names of the pilots are being withheld for next of kin notification....