Boeing (NYSE: BA) has agreed to purchase aviation parts and services provider KLX (Nasdaq: KLX) for approximately $3.2 billion cash in a move to grow its services business.
Boeing said Tuesday it will pay $63 per share in cash and assume $1 billion in net debt from the Wellington, Florida-based aerospace parts distributor as part of the deal.
Both companies expect to close the transaction in the third quarter of 2018, subject to shareholder approval, regulatory clearance and other customary closing conditions.
Boeing will integrate KLX’s aerospace solutions group with Aviall and operate it as part of global services business upon the closure of the deal, which is contingent upon the sale and separation of KLX’s energy services group.
KLX’s Miami-based aerospace solutions group, which posted $1.4 billion in fiscal 2017 revenue, has approximately 2,000 employees, operates customer service facilities in at least 15 countries and provides aviation parts and aftermarket services.
“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,” Deal added.
Boeing expects the transaction to generate annual cost savings of about $70 million by 2021 and have an impact on earnings through 2019.
