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CAE To Buy L3Harris' Military Training Business For $1.05 Bln - Quick Facts

Technology company CAE Inc. (CAE.TO,CAE) agreed Monday to acquire the military training division of aerospace and defense technology firm L3Harris Technologies Inc. (LHX) for $1.05 billion, subject to customary adjustments.

The acquisition will expand CAE's position as a platform-agnostic training systems integrator by diversifying CAE's training and simulation leadership in the air domain, complementing land and naval training solutions, and enhancing CAE's training and simulation capabilities in space and cyber.

The L3Harris Military Training business includes Link Simulation & Training, Doss Aviation and AMI. Upon closing, the L3Harris Military Training business would operate under CAE USA, headquartered in Tampa, Florida.

The acquisition is expected to be low-teens percentage EPS accretive to CAE in the first full year post closing, including expected cost synergies. The closing of the acquisition is expected in the second half of calendar year 2021, subject to regulatory approvals and other customary closing conditions.

The cost synergies are expected to reach a range of C$35 million to C$45 million annually by the end of the second year following closing of the acquisition.

With annual revenues of approximately $500 million in 2020, L3Harris Military Training brings scale and capabilities that support CAE's imperative to align closely with the National Defense Strategy in the United States.

The acquisition and other related transaction costs are to be funded through the issuance of C$700 million aggregate amount of subscription receipts to two institutional investors on a private placement basis as well as other currently available liquidities.

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