The Boeing Company, Chicago, IL, had agreed to acquire aviation parts distributor Aviall, Inc., Dallas, TX, in an all cash merger for $48 per share or $1.7 billion. Boeing will also assume about $350 million of net debt as part of the transaction.
Aviall’s 2005 revenue was $1.3 billion, with more than 25% growth expected in 2006.
“The aviation services market offers us tremendous opportunities to profitably grow our business, internally and externally, to better serve our commercial and military customers,” said Boeing Chairman, President and Chief Executive W. James McNerney. “This acquisition is uniquely powerful in that it leverages the strong and growing services units of both our commercial and military businesses.’
Aviall will report to Boeing Commercial Aviation Services and operate as a wholly-owned subsidiary. Commercial Aviation Services offers Integrated Materials Management (IMM) services to airline customers. Through this program, Boeing and selected suppliers maintain an airline’s inventory of maintenance supplies — including spare parts — and provide items only as needed, reducing the airline’s cost and complexity of doing business. Aviall’s parts ordering and supply chain management capabilities will also be utilized by Boeing’s Integrated Defense Systems’ Support Systems business.
The completion of the transaction is subject to customary conditions and relevant authorities’ approval and is expected to close by the end of the third quarter 2006. Boeing plans to fund the transaction with existing cash. The acquisition is expected to be modestly accretive to Boeing’s earnings in 2007 and have an immaterial earnings impact in 2006.
With approximately 1,000 employees, Aviall has service centers in North America, Europe and Asia. As an independent provider of new aviation parts and related aftermarket services, Aviall markets and distributes products for about 220 manufacturers and offers 700,000 catalog items. Aviall also offers a full line of aviation batteries, hoses, wheels and brakes, and paint services.
