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Abney Associates Advise On Arinc Buyout

By Author: Rick Abney
Total Articles: 25

Arinc Inc. the aviation information management company has been purchased from its Carlyle Group owners, Rockwell Collins Inc. The aerospace manufacturer has paid $1.39 billion for Arinc in their continuing efforts to expand their footprint in the aviation sector. The deal is the largest this year in the North American aviation sector eclipsing, Precision Castparts Corp’s $600 million purchase of Permaswage SAS earlier this year .

“This has been a long expected move by Rockwell as they have been hinting for some time of their desire to diversify and gain further access within the civilian market. Arinc was simply too good an opportunity to pass up and the acquisition price reflects this. Carlyle group took the same position back in 2007 when they bought Arinc from American Airlines and it’s just as deserving today,” explained James Carter, Senior Vice President of Mergers and Acquisitions at Abney Associates.

The purchase comes as Rockwell Collins finds itself increasing its business in commercial aviation as it draws down on Government contracts. The company, which expects to accrue sales of $4.65 billion this year, has wanted to further diversify within the aviation sector for some time and Arinc with its estimated revenues of $600 million was a sound strategic investment for acquisition. With the addition of Arinc to the group, Rockwell Collins business is almost split between government and civilian markets, 46% and 54% respectfully.

With the purchase of Arinc under new CEO Kelly Ortberg, Rockwell Collins continues what has been a well performing year with the company’s share value exceeding the S&P 500’s 19% gains with a rise in value of 28%. This performance has much to do with Rockwell becoming the supplier of cockpit instrumentation to Boeing for use on all of its 737 fleet, after replacing Honeywell International. The company is also a major supplier for electronics for use in Boeing’s 777 and 787 aircraft.

“With Government orders down this year most of the big players in Aviation have faced some difficult decisions to maintain their bottom lines, Rockwell came up with very elegant solution with the purchase of Arinc and its civilian market only revenue steam. As an investment vehicle, Rockwell makes a lot of sense, as their value is not based on the ability to score just individual contracts as required, but rather by maintaining long-term income. This makes them far more stable an investment than many of their peers and is why we’re observing them closely on our client’s behalf,” added James Carter, Senior Vice President of Mergers and Acquisitions at Abney Associates.

Abney Associates are a Hong Kong based company that provides a range of financial services to individual clients, portfolio companies, corporate investors and entrepreneurs who wish to take unbiased financial advice.

Abney Associates are primarily a team of financial specialists who pride themselves on having a high level of expertise and vast experience for diligently monitoring any positive or negative developments to companies currently listed on exchanges globally, especially those that may affect client investment interests. This is done in order to ensure the financial advice given is factually correct and delivered in an effective way.

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