US-based aerospace and defines solution provider Rockwell Collins has signed a definitive agreement to acquire aircraft cabin interior manufacturer B/E Aerospace for $8.3bn.

With the acquisition, Rockwell Collins aims to boost its position in the cockpit and cabin solutions market.

The total consideration of the deal includes approximately $6.4n cash and stock, as well as an assumption of $1.9bn net debt.

According to the deal, each B/E Aerospace shareowner will receive total consideration of $62 a share, which includes $34.10 a share in cash and $27.90 in shares of Rockwell Collins common stock, subject to a 7.5% collar.

"We firmly believe there are revenue synergies that create meaningful upside to our business case.”

Rockwell Collins chairman, president and CEO Kelly Ortberg said: “B/E Aerospace has a leading position in nearly all the segments it serves and a highly visible, long-cycle backlog. Beyond new aircraft deliveries, its $12bn installed base provides a strong flow of aftermarket retrofit opportunities that balances our current cyclical exposure to OEM production rates.

“Additionally, our combined portfolio uniquely positions us to integrate cabin products, smart network technologies and connectivity solutions to significantly enhance aircraft uptime and airline profitability while improving the experience of passengers and airline personnel.

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“We expect to generate significant run-rate cost synergies and over $6bn in free cash flow over the next five years with expected free cash flow conversion of greater than 100%. In addition, by leveraging our respective airline and OEM relationships, as well as Rockwell Collins’ business jet dealer network and military aircraft positions, we firmly believe there are revenue synergies that create meaningful upside to our business case.”

Subject to the approval of the shareowners of both the companies, as well as other regulatory and customary conditions, the deal is expected to be completed by next year.

Image: B/E Aerospace – super diamond business class seat. Photo: courtesy of B/E Aerospace.