CAE Inc. agreed to buy the military training division of L3Harris Technologies Inc. for $ 1.05 billion, the companies said on Monday, in a move that would expand the Canadian aerospace company’s defense business.
The unit includes three main businesses: Link, which provides military training in the United States; Doss Aviation, which offers flight training for the United States Air Force; and AMI, which designs and manufactures simulator hardware. The company, which has about $ 500 million in annual revenue, is expected to be headquartered in Tampa, Florida, after the deal closes, the company said.
The Wall Street Journal reported on Sunday that such a deal was imminent.
CAE, based in Saint-Laurent, Quebec, expects the deal to be an addition to earnings per share and foresees cost savings of about 35 million to 45 million Canadian dollars a year in the second year after closing. It should be financed by a private placement of about C $ 700 million, equivalent to about $ 549.4 million.
CAE has a market value of around C $ 9.5 billion. It has historically specialized in flight simulators and training devices and has expanded its reach through several businesses in the past few months, although none of them comes close to the size of the business being discussed for the L3Harris unit.