Global private equity firm KKR & Co. L.P. (NYSE: KKR) agreed to acquire the defense electronics business of Airbus Group SE (EPA: AIR) for €1.1 billion ($1.2 billion). Airbus Group may maintain a minority stake, it said.
The deal is expected to close in the first quarter of 2017 and is subject to customary closing conditions, including regulatory approvals.
American private-equity firms Carlyle Group LP (NYSE: CG) and Blackstone Group LP (NYSE: BX) were among the competing bidders for the defense electronics assets on sale. German defense group Rheinmetall (XE: RHM), as well as a consortium comprising space technology group OHB (ETR: OHBG) and European private equity firm Cinven had also submitted competing bids for the assets.
“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,” said Bernhard Gerwert, CEO of Airbus Defence and Space.
“We are delighted to have been chosen as the best partner for the defence electronics business,” said Johannes Huth, member and head of KKR Europe, Middle East and Africa.
The Airbus defense electronics unit is a global provider of mission-critical sensors, integrated systems and services for premium defense and security applications based in Ulm, Germany. The unit includes around 4,000 employees worldwide, with annual revenues of around €1 billion. The perimeter of the new company comprises military sensors, electronic warfare, avionics and optronics. Since January 2016, the unit has operated under the management team as one business within Airbus Defence and Space.
Airbus Group is a global leader in aeronautics, space and related services. In 2015, the Group – comprising Airbus, Airbus Defence and Space and Airbus Helicopters – generated revenues of €64.5 billion and employed a workforce of around 136,600. The company was originally formed as the European Aeronautic Defence and Space Company NV (EADS) in 2000, and is headquartered in Toulouse, France.
KKR, founded in 1976 and headquartered in New York City, is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world‐class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners’ capital and brings opportunities to others through its capital markets business. As of December 31, 2015, the firm had $120 billion in assets under management. KKR has a market capitalization of $6.87 billion, as of March 18, 2016.