KKR to buy Airbus Group's defence electronics unit for $1.2 bn
19 March 2016
US private equity firm KKR yesterday struck a deal to buy the defence electronics business of Airbus Group for €1.1 billion ($1.2 billion).
Airbus Group said that it may maintain a minority stake to ensure a smooth and seamless transition of the business, its employees and partners.
Airbus Group's defence electronics business under the name Defence Electronics, makes components for radars, optronics, electronic warfare and border control applications, which are used in surveillance or for equipment used by pilots to fly at night or in fog conditions.
The Ulm, Germany-based company employs around 4,000 people worldwide, and has annual revenues of around €1 billion.
Since January 2016, the unit has operated under the management team as one business within Airbus Defence and Space.
Last year, the Airbus Group said that it had put its defence and security electronics and satellite communications services businesses up for sale to make its defence and aerospace subsidiary leaner and more sustainable.
The company had earlier planned to sell its defence electronics and border security units as one package, but its aim of concluding a deal by early 2016 was being delayed due to an ongoing border project in Saudi Arabia. (See: Airbus to exclude border security unit in defence electronics sale)
The European aerospace and defence giant declared core activities of the division to be rocket launchers and satellites, fighter aircraft and missiles.
Airbus Defence & Aerospace was formed in January 2014 during the corporate restructuring of European Aeronautic Defence and Space (EADS), and comprises the former Airbus Military, Astrium, and Cassidian divisions.
Bernhard Gerwert, CEO 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,'' he added.
Johannes Huth, member and head of KKR Europe, Middle East and Africa, said, ''KKR will support the growth and development of the company with its financial resources, international network, long-standing 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.''