Boeing pays US$4.25bn to Acquire Aerospace Parts Distributor KLX Inc.

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Boeing has announced that it has entered into a definitive agreement to acquire KLX Inc. excluding KLX Inc.’s Energy Services Group. KLX is a major independent provider of aviation parts and services within the aerospace industry.

The intention is for KLX to become fully integrated with Boeing’s Aviall in order to broaden the scope of what customers can be offered, while also providing a clear route to accelerate the business’ growth. KLX’s Miami facilities are anticipated to remain as the principal operating location.

According to Stan Deal, president and CEO of Boeing Global 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. 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.”

KLX’s Aerospace Solutions Group revenue in the 2017 financial year was US$1.4 billion and Boeing anticipates a neutral earnings impact through 2019 and accretion thereafter with the acquisition, while annual cost savings should increase to approximately US$70 million by 2021, plus further improvements realized over time. The transaction will be financed primarily with cash on hand, supplemented with debt.

With approximately 2,000 employees, KLX Aerospace Solutions Group is headquartered in Miami with customer service centers located in more than 15 countries. As a major independent provider of new aviation parts and related aftermarket services, KLX markets and distributes products for approximately 2,400 manufacturers and offers approximately 1 million catalog items.

The agreement comprised an all-cash transaction for US$63 per share and the assumption of approximately US$1.0 billion of net debt, totaling US$4.25 billion. The sale is expected to close by the third quarter of 2018.

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