Airbus Group has reached agreement with investment firm to sell its defence electronics business (Defence Electronics), which provides mission-critical sensors, integrated systems and services for premium defence and security applications and is based in Ulm, Germany.
The transaction is expected to close in the first quarter of next year and is subject to customary closing conditions, including regulatory approvals and employee consultation.
Airbus said the sale ‘is a significant step forward in the portfolio reorganisation announced by the Airbus Defence and Space Division in September 2014’. There is as yet no news on the sale of other parts of the Group, including the Secure Land Communications unit (including the former Cassidian and Astrium businesses), which was originally expected to be announced in summer 2015.
Bernhard Gerwert, chief executive officer of Airbus Defence and Space, said: “This is an excellent outcome for our Orlando process which aimed at repositioning Defence Electronics for the future with an excellent outcome for all stakeholders. Defence Electronics is a strong, profitable business with significant growth potential and we are convinced that KKR and the Defence Electronics management team and employees will continue to strongly develop the business going forward.”
KKR has valued the defence electronics business at an enterprise value of approximately €1.1bn. Airbus Group may maintain a minority stake to ensure a smooth and seamless transition for the business, its employees and partners.
Johannes Huth, member and head of KKR Europe, Middle East and Africa, said: “We are delighted to have been chosen as the best partner for the defence electronics business. KKR will support the growth and development of the company with its financial resources, international network, longstanding expertise in the global industrial sector and its extensive experience building successful industrial companies in Germany, such as MTU Aero Engines, Demag Cranes and Kion.”
Defence Electronics includes around 4,000 employees worldwide, with annual revenues of around €1 billion. The perimeter of the new company comprises military sensors, electronic warfare, avionics and optronics. Since January 2016, the unit has operated under the management team as one business within Airbus Defence and Space.
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