Rockwell Announces $ 1.4 billion Deal to Acquire ARINC

Rockwell Announces $ 1.4 billion Deal to Acquire ARINCCEDAR RAPIDS, Iowa – On Sunday, Rockwell Collins (NYSE:COL) announced that it had agreed to terms for the acquisition of ARINC, a subsidiary of the Carlyle Group L.P. (NASDAQ:CG).  The deal is meant to boost Rockwell’s information management business, as well as reduce the company’s reliance on Government work to approximately 54 percent after the acquisition is completed.

According to reports, the deal is worth approximately $ 1.39 billion on ARINC’s expected revenues for 2013 of $ 600 million.  Speaking on the acquisition of the aviation information system company Rockwell’s CEO, Kelly Ortberg said, ‘strategically, this acquisition is a natural fit for Rockwell Collins as it accelerates our strategy to develop comprehensive information management solutions by building on our existing information-enabled products and systems and ARINC’s ground–based networks and services to further expand our opportunities beyond the aircraft.’

The deal also represents an effort by Carlyle to cash out on its investments, either through sale or through initial public offering.  Representatives for Carlyle hinted that the firm would continue to take advantage of the favorable valuation of its portfolio of companies by focusing on divesting some of their holding for the near future.  In the case of ARINC, Carlyle had been able to attract interest from several bidders before Rockwell won out.

The announcement followed a busy week for Rockwell, who named Rothberg to succeed retiring CEO Clay Jones on August 7.  Ortberg is a veteran of Rockwell having joined the company in 1987 and has severed as Executive Vice President and Chief Operating Officer of Government Systems before being named company President in 2012.

As Executive Vice President Ortberg oversaw several key programs including avionics business on the KC-46A, KC-10 and, the Embraer (NYSE:ERJ) KC-390 as well as development programs for the Boeing (NYSE:BA), and the Airbus (FTSE:EADS) A350.  According to Independent Director Anthony Carbone, ‘we’re fortunate to have such a proven and qualified successor as CEO, Kelly’s strong record of success, passion to win and extensive knowledge of our customers and business make him the ideal choice to lead Rockwell Collins into the future.’

On the same day, Rockwell announced a one-year contract from the National Aeronautics and Space Administration for the development of a new set of analysis tools for safety verification of flight critical systems.  Under the contract, Rockwell will develop software analysis tools intended to verify the new capabilities and safety of future commercial aircrafts.

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About the author

Audrey is a senior editor for the business and finance sections.