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July 5, 2021updated 01 Nov 2021 9:15am

L3Harris closes sale of certain business units to CAE and RENK for $1.45bn

The company plans to use proceeds from the divestitures towards share repurchases.

L3Harris Technologies has completed the sale of its military training business to CAE for a cash consideration of $1.05bn.

Furthermore, L3Harris also closed the sale of its Combat Propulsion Systems and related businesses to RENK AG for $400m in cash.

In March this year, L3Harris Technologies signed a definitive agreement to divest its military training business and Combat Propulsion Systems business, to CAE and RENK, respectively.

L3Harris’ military training business generates annual revenue of approximately $525m, while the company’s Combat Propulsion Systems business has an annual revenue of approximately $230m.

The Combat Propulsion Systems business is a producer of military engines and transmissions.

The company plans to use proceeds from the divestitures towards share repurchases. Both the deals are jointly valued at $1.45bn.

L3Harris’ military training business includes link simulation and training, Doss Aviation and AM. It will now operate under CAE USA.

The military training business acquisition will strengthen CAE’s presence as a ‘platform-agnostic’ training and simulation firm in the global defence and security industry.

With this acquisition, CAE’s core military training business in the US will almost be doubled.

The acquisition will also increase CAE’s expertise in addressing multi-domain operations in air, land, sea, space and cyber, as well as expanding into adjacent markets such as mission and operations support.

L3Harris has appointed Morgan Stanley as financial advisor and Sullivan & Cromwell as legal counsel on the Military Training transaction.

Meanwhile, Moelis & Company served as financial advisor and Simpson Thacher & Bartlett acted as legal counsel for the Combat Propulsion Systems and related businesses transaction.

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