CAE Inc. agreed to buy the military training division of L3Harris Technologies Inc. for $ 1.05 billion, the companies said Monday, in a move that would expand the Canadian aerospace company’s defense business.
The unit includes three main activities: Link, which provides military training in the United States; Doss Aviation, which provides flight training to the US Air Force; and AMI, which designs and builds simulator hardware. The company, which has annual revenues of about $ 500 million, is expected to be headquartered in Tampa, Florida, after the transaction is completed, the company said.
The Wall Street Journal reported Sunday that such a deal was imminent.
The Quebec-based CAE in Saint-Laurent expects the business to be a earnings per share and estimates cost savings of approximately C $ 35 million to C $ 45 million per year in the second year after closing. It will be financed by a private placement of approximately C $ 700 million, the equivalent of approximately C $ 549.4 million.
CAE has a market value of approximately C $ 9.5 billion. Historically, it has specialized in flight simulators and training devices and expanded its coverage area through several offerings in recent months, although none have come close to the size of the offer discussed for the L3Harris unit.