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Rockwell expands presence in commercial markets with Arinc buy
August 12, 2013 / 5:35 PM / 4 years ago

Rockwell expands presence in commercial markets with Arinc buy

Aug 12 (Reuters) - Rockwell Collins, expanding its commercial market business as its defense business comes under pressure, is buying Arinc, an aerospace communications company, for $1.39 billion.

The supplier of avionics and other electronic systems for airplanes said the purchase from Carlyle Group LP would enable it to expand sales as newer airplanes are equipped with information-management systems for the flight deck and cabin.

Annapolis, Maryland-based Arinc designs systems that help airline pilots communicate with the ground. It also provides transport communications and systems for defense, government, healthcare and other sectors.

Kelly Ortberg, who assumed the CEO job at Rockwell Collins from longtime executive Clay Jones this month, said the acquisition would help Rockwell capitalize on the growth in digital information exchange in the cockpit and cabin.

Arinc will allow Rockwell Collins "to provide a broader set of solutions to our customers in moving digital information from the airplane to the ground and back," Ortberg said in an interview on Monday.

Rockwell Collins, based in Cedar Rapids, Iowa, announced the purchase on Sunday.

The company is counting on commercial demand to drive growth as the United States curbs defense spending. As of its most recent quarterly earnings report, Rockwell Collins sales were roughly split 51 percent-49 percent between government sales and commercial sales.

Rockwell Collins has reduced its business in some defense segments, curbed unnecessary research and development expenses and cut jobs as U.S. military spending came under pressure.

Shares of Rockwell Collins were off 1.7 percent at $73.19 in afternoon trading on Monday, while shares of Carlyle Group were off 0.6 percent at $26.89.

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