Boeing to buy aerospace parts maker KLX for $4.25bn

Boeing has agreed to buy aerospace parts maker KLX Inc for $4.25bn including debt.

The deal, which comprises an all-cash transaction for $63 a share and the assumption of around $1bn of net debt, will include KLX's aerospace solutions group and is conditional upon the divestment and separation of KLX's energy services group.

Stan Deal, president and chief executive officer of Boeing Global Services, said: "This acquisition is the next step in our services growth strategy, with a clear opportunity to profitably grow our business and better serve our customers in a $2.6trn, 10-year services market.

"By combining the talent and product offerings of Aviall and KLX Inc, we will provide a one-stop-shop that will benefit our supply chain and our various customers in a meaningful way."

KLX provides aviation parts and services in the aerospace industry and supplies chemical composites. For FY2017, revenue at the company's aerospace solutions group was $1.4bn.

The deal is expected to have a neutral earnings impact through 2019 and accretion thereafter, with annual cost savings growing to around $70m by 2021 and further improvements realised over time.

The acquisition, which is subject to approval by a majority of KLX shareholders, is expected to close by the third quarter of this year.

Boeing said there was no change to its 2018 guidance or capital employment strategy and it remains committed to returning around 100% of free cash flow to shareholders.