Canadian aerospace company CAE (NYSE: CAE) is close to finalizing a potential $1.05 billion deal to acquire the military training division of L3Harris Technologies (NYSE: LHX) as part of a push to expand its defense business, The Wall Street Journal reported Sunday.
WSJ cited sources that say the acquisition agreement could be ready by Monday and will be funded through a private placement worth approximately $549.4 million from two institutional investors.
The L3Harris division has an annual revenue of about $500 million and includes three businesses: Doss Aviation, which offers flight training support to the U.S. Air Force; Link, a U.S. military training services provider; and simulator hardware manufacturer AMI. Sources said the division is expected to be headquartered in Tampa, Florida, once the deal is completed.
CAE expects the acquisition to be accretive to earnings per share and anticipates annual cost savings of about $27.5 million to $35.4 million in the second year post-close, according to people familiar with the matter.