On Tuesday, May 1, aircraft maker Boeing said it will buy aerospace parts company KLX for about US$3.2 billion in cash and US$1 billion in debt to expand its aircraft services business, Bloomberg reported, contingent on KLX spinning off its energy business.
The deal is the largest struck so far by Chief Executive Officer Dennis Muilenburg, who has been scouting acquisitions that would more than triple sales at Boeing’s services business to US$50 billion within a decade. Boeing has held preliminary talks with partsmaker Woodward, according to media reports in February, and is deep into talks to form a joint venture that would give it control of Embraer SA’s commercial jets.
KLX will become part of Boeing Global Services and will be fully integrated with the planemaker’s parts subsidiary, Aviall, with an anticipated annual cost savings of US$70 million by 2021, according to Bloomberg.
“We continue to see global services as our biggest market-growth opportunity,” Muilenburg told reporters at the company’s annual meeting Monday, hours before the deal was announced. The transaction will be financed primarily with cash on hand, supplemented with debt.
Full Content: Bloomberg
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