Boeing Co said on Monday it agreed to buy aerospace parts supplier Aviall Inc for $1.7 billion, as the planemaker looks to expand its services operations in the wake of a boom in new plane orders. The deal marks the first major corporate move by Boeing's new chief executive James McNerney, who took the helm 10 months ago.
Boeing is expanding its aviation services operations as it comes off a peak in commercial plane orders. The Chicago-based company took a record 1,002 commercial plane orders in 2005, and European rival Airbus took 1,055, fuelled by a resurgence in travel world-wide.
Boeing's Commercial Aviation Services unit is expected to bring in revenue of about $3 billion this year, which would expand by more than 40 percent with the addition of Aviall. Boeing had total revenue of $55 billion last year.
Boeing said it would pay $48 per share in cash for Aviall, a 27 percent premium to Avisall's closing price of $37.70 on Friday on the New York Stock Exchange. Boeing said it would also take on about $350 million of Aviall debt.
The deal, set to close by the end of September, would not affect Boeing's earnings this year, but add to earnings next year, Boeing said.
Dallas-based Aviall, with annual revenue of about $1.3 billion, is the world's leading independent distributor of new aviation parts to the aerospace, defence and marine industries world-wide.
Comments
Comments are closed.