B/E Aerospace Inc (NASDAQ:BEAV) Rockets Higher After Earnings, Acquisition by Rockwell Collins


Shareholders B/E Aerospace Inc (NASDAQ:BEAV) likely had dollar signs in their eyes after the company agreed to be acquired by Rockwell Collins at a 22.5% premium to the Friday closing.

The B/E Aerospace Inc (NASDAQ:BEAV) stock jumped 16.36% to close Monday at $58.89, with 22.04 million shares changing hands.

B/E Aerospace is a global leader in the manufacture of cabin interior products for both commercial and business jets. Rockwell Collins develops and deploys aviation solutions such as flight deck avionics, cabin electronics communications and simulators for both commercial and defense applications.

Rockwell Collins to Acquire B/E Aerospace (NASDAQ:BEAV) for $8.3 billion

Rockwell will pay about $6.4 billion in cash and stock to B/E shareholders and also assume $1.9 billion of B/E’s debt, making a total consideration of $8.3 billion.

Each B/E Aerospace shareowner will receive a consideration of $62.00 per share, comprised of $34.10 per share in cash and $27.90 in shares of Rockwell Collins common stock.

B/E Aerospace Founder and Chairman, Amin Khoury, said, “Our combination with Rockwell Collins represents an excellent outcome for B/E Aerospace’s stockholders, who will receive an immediate premium as well as a substantial equity interest in a strong combined company with a broader range of products, customers, and the combined expertise and resources to create future value.”

Aircraft component suppliers have been under pressure from Airbus and Boeing to reduce costs, leading to consolidation and restructuring within the industry. “It’s an opportunity to build a smarter plane,” said Richard Aboulafia, an aerospace analyst at Teal Group, to Bloomberg. “Given the pricing pressure you’ll probably see more deals like this.”

More joy for B/E Aerospace (NASDAQ:BEAV) investors

B/E also simultaneously announced its third quarter numbers. EPS of $0.83 beat estimates by $0.03 and revenue of $732.7 million was ahead of market expectations by $25.25 million.

The company said it won strong bookings and program awards of approximately $1.4 billion during the quarter, driven by demand from North American and Chinese airlines.

For the full year 2016, B/E raised its guidance for net earnings and net earnings per diluted share to about $330 million and approximately $3.28 per share, respectively.


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