Safran, the French multinational aeronautics firm, has announced its intent to acquire the high-technology actuation and flight control division of Collins Aerospace. This segment is vital for the operation of commercial and military aircraft as well as helicopters.
The business unit that Safran is aiming for employs about 3,700 people across eight facilities in Europe (France, UK, and Italy) and Asia. It also boasts maintenance, repair, and overhaul (MRO) capabilities, as well as engineering capabilities. Safran estimates that this segment of Collins Aerospace will generate sales of around $1.5 billion and an EBITDA of $130 million in 2024.
Olivier Andriès, CEO of Safran, views this transaction as a «unique opportunity» to bolster its position in the actuation and flight control industry. According to Andriès, the product offerings of both companies are highly complementary, which would result in the creation of a global leader in these segments, with around $1.8 billion in sales.
The planned acquisition, which is expected to be fully financed with available cash, would also yield approximately $50 million in annual cost synergies. These would be progressively implemented from 2025 to 2028 and would mainly stem from economies of scale in procurement, R&D complementarity, and internalization of sourcing and production flows.
Safran anticipates an enterprise value of $1.8 billion, which would represent a multiple of approximately 14x pre-cost synergies and 10x post-run-rate cost synergies, based on the projected EBITDA for 2024.
The deal would be subject to the approval of the representative bodies of employees of Collins and Safran, as well as customary regulatory approvals and closing conditions. The operation is expected to be finalized in the second half of 2024.
