News
Boeing continues supply chain consolidation with US$4.25 billion KLX Inc. acquisition
May 4th 2018
Boeing on Tuesday announced it had agreed to buy aviation parts and services provider KLX Inc. for US$4.25 billion in an all-cash transaction of US$63 a share and the assumption of approximately US$1 billion of net debt. Read More »
The acquisition will include KLX Inc.'s Aerospace Solutions Group, and is conditional on the successful investment and separation of KLX Inc.'s Energy Services Group.
KLX Inc. is a major independent provider of aviation parts and services to the aerospace industry. Its capabilities include global parts distribution and supply chain services for aerospace and defence industries worldwide. KLX Inc. will be part of Boeing Global Services and be fully integrated with Aviall.
“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,” said president and CEO of Boeing Global Services, Stan Deal. “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 Inc.'s Aerospace Solutions Group employees and operations will be integrated with Aviall with the Miami facility expected to remain the company’s principal operating location.
“Our customers have long desired a supplier who could offer essentially 100 percent of their requirements for fasteners, consumables and expendables. The combination of Aviall and KLX Aerospace facilitates the broadest scope of parts and products to support all customer fleet types for the commercial, military and defense and business and general aviation markets,” said KLX Chairman and CEO, Amin Khoury.
KLX Inc.'s Aerospace Solutions Group 2017 revenue was US$1.4 billion. Boeing expects the acquisition to have a neutral earnings impact until 2019 with accretion from that date. Annual cost savings are expected to be US$70 million by 2021.
Boeing’s acquisition of KLX is part of a wider supply chain consolidation trend. In January, Boeing announced the establishment of Adient Aerospace, a joint venture (JV) that will develop, manufacture and sell aircraft seating products on new airplanes and retrofitted jets built by Boeing and other OEMs. The JV is awaiting regulatory approval.
