CAE announced that it expects to close its $1.05 billion acquisition of the military training business of L3Harris Technologies (NYSE: LHX) on Friday, July 2, after securing all regulatory approvals needed to complete the transaction.
The deal was first announced in March and CAE said Monday L3Harris’ military training segment will enable it to broaden its presence as a platform-agnostic training and simulation company in the global defense and security market.
“This Acquisition will bring scale, experience and capabilities that support our strategy to align closely with the National Defense Strategy in the United States,” said Daniel Gelston, group president for defense and security at CAE. “As the United States and its allies train for a near-peer threat, we expect increasing demand for simulation-based training and the use of synthetic environments across all battlespace domains.”
Gelston added that the transaction will strengthen CAE’s ability to deliver digitally immersive platforms for operational and training support needed for multidomain operations.
“This represents the largest acquisition in our history and clearly demonstrates our strategy to strengthen and expand our position in all the markets CAE serves,” said Marc Parent, president and CEO of CAE.
Doss Aviation, the AMI simulator hardware manufacturing facility, Link Simulation & Training and other components of the L3Harris military training business will operate as part of CAE’s U.S. arm headquartered in Tampa, Florida.
CAE USA will gain capabilities in the development of training systems for bomber and fighter aircraft, submarines, remotely piloted aircraft and U.S. Army rotary-wing platforms. The U.S. subsidiary will also have an opportunity to work on the U.S. Air Force’s Ground Based Strategic Deterrent training and Simulators Common Architecture Requirements and Standards programs, among other initiatives, as a prime or subcontractor.
CAE expects the deal to be accretive to operating income and deliver low teens percentage earnings per share accretion within the first full year after closure.