* Separation expected to be completed in 1st qtr of 2015
* Says strategic review to continue
* Raises 2014 profit forecast to $4.35/share from $4.30
* Shares fall as much as 6 pct
(Adds investor, executive comments, details; updates shares)
By Rohit T. K. and Sagarika Jaisinghani
June 10 B/E Aerospace Inc, an aircraft
seat maker and parts distributor, will split into two publicly
traded companies, making it easier for the company to pursue a
sale of its businesses.
The $10 billion company - which with rival Zodiac Aerospace
controls around 70 percent of the world's aircraft
seats market - made a surprise announcement in May that it was
considering selling itself, among other strategic alternatives.
"As two standalone entities, it could theoretically make it
easier for a potential acquirer to make a bid," RBC Capital
Markets analyst Robert Stallard wrote in a note.
B/E Aerospace's shares fell as much as 6 percent as
investors had hoped for a sale of the company.
B/E Aerospace said on Tuesday that one company would focus
on making aircraft cabin products, while the other would
concentrate on distribution, logistics and technical services
for aerospace and energy services markets.
The separation is likely to be completed in the first
quarter of 2015, the company said.
The strategic review will continue and could include a
"change of control transactions," Chairman Amin Khoury said,
hinting at a possible sale of its businesses in the future.
The 26-year-old company, which counts Boeing Co and
Airbus Group NV as customers, also named former
Honeywell chief financial officer David Anderson to its board.
B/E Aerospace's shares were down 5 percent at $94.04 in
afternoon trading on the Nasdaq, after touching a low of $93.23.
Until Monday's close, the stock had risen about 11 percent since
the company said on May 4 that it was looking to sell itself.
Sterne Agee & Leach analyst Peter Arment said he expected
the two companies to be valued at $105-$131 per share combined.
Investor St. Denis J. Villere & Co LLC, which owns about 1.8
percent of B/E Aerospace, will be happy to sell its holding at
$120 per share, said portfolio manager St. Denis Villere, III.
"I would have preferred for management to have sold B/E ...
but that did not happen," Villere said.
Florida-based B/E Aerospace trades at about 20 times
12-months forward earnings, compared with 13.5 times for peer
Wesco Aircraft Holdings Inc and 17.1 for Zodiac,
according to Thomson Reuters StarMine.
B/E Aerospace also raised its profit forecast for the year
ending Dec. 31 to $4.35 per share from $4.30 per share.
Analysts on average were expecting $4.39 per share,
according to Thomson Reuters I/B/E/S.
(Writing by Sweta Singh in Bangalore; Editing by Kirti Pandey)