Business

Rockwell Collins pressured by activist fund to reconsider B/E Aerospace acquisition

Standard Value suggests company could consider selling itself

B/E Aerospace photo

B/E Aerospace Super Diamond business class seating is manufactured by the Wellington, Fla., compa
B/E Aerospace photo B/E Aerospace Super Diamond business class seating is manufactured by the Wellington, Fla., company, which has agreed to be acquired by Rockwell Collins in Cedar Rapids. The acquisition, expected to close in the spring of 2017, will significantly increase employment, sales and product diversity for Rockwell Collins.

New York activist investment fund Starboard Value is pressuring Rockwell Collins to call off its proposed purchase of B/E Aerospace and consider other options — including selling itself, according to Bloomberg News.

While saying it will not comment on “market rumors,” Cedar Rapids-based Rockwell Collins issued a statement Wednesday reaffirming its support for the proposed merger.

“We remain confident that the acquisition of B/E Aerospace will create significant value for our shareholders,” the avionics and communications equipment supplier said in a statement. “We’re excited to bring together these two industry leaders and look forward to closing this transformative transaction in the spring of 2017.”

The company on Oct. 23 announced plans to acquire the Wellington, Fla.-based aircraft interior maker for $6.4 billion to expand the range of products it sells for commercial and business aircraft.

B/E Aerospace manufactures seating, food and beverage preparation and storage equipment, lighting and oxygen systems, and modular galley and lavatory systems for commercial airliners and business jets.

Rockwell Collins would have to pay B/E Aerospace a breakup fee of $300 million if it decides not to go through with the deal.

The purchase of B/E Aerospace, with its 10,000 employees, would be the largest acquisition by Rockwell Collins as a publicly traded company. It previously bought ARINC Inc. in 2013 for $1.4 billion from the Carlyle Group.

Shareholders of both companies need to approve the merger.

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The transaction would create a company with roughly 30,000 employees, combined annual revenue of about $8.1 billion, and $1.9 billion in earnings before interest, taxes and amortization for the year that ended on Sept. 30.

l Comments: (319) 398-8366; george.ford@thegazette.com

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