Defense contractor L3Harris Technologies Inc LHX has signed a definitive agreement under which an affiliate of TJC L.P. will acquire its Commercial Aviation Solutions (CAS) business for $800 million.
The deal includes a $700 million cash purchase price and $100 million earnout based on the achievement of certain 2023 and 2024 financial performance targets.
The amount represents an approximate 15x LTM 9/30 EBITDA purchase multiple. The transaction is expected to close in the first half of 2024 and is subject to customary regulatory approval.
"Today's announcement is consistent with our multi-year strategy to optimize our national security, technology-focused portfolio," said Chair and CEO Christopher E. Kubasik.
"Aligned with our capital allocation priorities, we plan to use the proceeds from this transaction to repay debt, which will accelerate our timeline to reach our debt leverage objective."
L3Harris' CAS business employs about 1,450 people and offers pilot training, flight data analytics, avionics, and advanced air mobility products and services.
The transaction includes the sale of L3Harris' surveillance joint venture and is subject to a right of first refusal; if exercised, an affiliate of TJC will acquire the rest of CAS.
Price Action: LHX shares are trading lower by 0.76% at $189.55 on the last check Monday.
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