CAE Nears Deal to Buy L3Harris’s Military-Training Business – The Wall Street Journal

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CAE Nears Deal to Buy L3Harris’s Military-Training Business – The Wall Street Journal

CAE Inc. is nearing a deal to buy L3Harris Technologies Inc.’s military-training division for $1.05 billion, according to people familia

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CAE Inc. is nearing a deal to buy L3Harris Technologies Inc.’s military-training division for $1.05 billion, according to people familiar with the matter, in a move that would expand the Canadian aerospace company’s defense business.

An agreement is expected Monday, assuming talks don’t fall apart, the people said.

The unit includes three main businesses: Link, which provides military training in the U.S.; Doss Aviation, which provides flight training to the U.S. Air Force; and AMI, which designs and makes simulator hardware. The business, which has about $500 million in annual revenue, is expected to be based in Tampa, Fla., after the deal’s close, the people said.

Saint-Laurent, Quebec-based CAE expects the deal to be accretive to earnings per share and forecasts cost savings of roughly 35 million to 45 million Canadian dollars a year in the second year post-close, the people said. It is to be funded by a private placement of roughly C$700 million, equivalent to about US$549.4 million, from two institutional investors, they said.

CAE has a market value of around C$9.5 billion. It has historically specialized in flight simulators and training devices and has been broadening its reach through several deals in recent months, though none anywhere near the size of the deal being discussed for the L3Harris unit.

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