The management of Rockwell Collins has entered into an agreement to acquire ARINC, a portfolio company of Carlyle Group and communications and information processing solutions provider for the commercial aviation industry, for $1.39 billion.
ARINC offers wide range of services across aviation sectors, including pilots, operators, maintenance, passengers, controllers, regulators, security, and airport operations.
The company, which is expected to report 2013 revenues of more than $600 million, also provides communications and information processing for the rail, industrial security, and public safety segments.
The deal will bring together two leading players in the field of aviation information management, combining ARINC's networks and services with the avionics and cabin technologies developed by Rockwell Collins.
Following the acquisition, the balance of Rockwell Collins' business will shift to approximately to 54% commercial and 46% government.
Rockwell Collins president and chief executive officer Kelly Ortberg says: "ARINC's strong customer base, high customer retention rates, and subscription business model will help the company achieve accelerated growth and benefit from greater earnings consistency throughout the commercial aviation business cycle."
ARINC chairman and chief executive officer John Belcher says: "Rockwell Collins' expertise in managing information on-board the aircraft, coupled with our innovative and reliable air to ground communications services, will be instrumental in providing new integrated information management solutions for our customers."
The transaction is subject to the receipt of regulatory approvals and other customary conditions. Citi acted as the financial advisor to Rockwell Collins for the transaction.
In a separate announcement, it was revealed that Rockwell Collins has teamed with NASA under a one-year contract to develop new software analysis tools to verify the safety of flight-critical systems for future commercial aircraft.
Rockwell Collins Advanced Technology Center Vice President John Borghese notes that complex avionics systems can literally have billions of modes and states. "By incorporating formal mathematical verification … we can detect and remove software bugs and security vulnerabilities early in the development process when it's less costly to correct errors."
Recently, Rockwell Collins secured a $16 million contract from the Defense Advanced Research Projects Agency (DARPA) High-Assurance Cyber Military Systems (HACMS) program to develop methods to provide cyber security solutions for unmanned aerial vehicles.