CAE has announced that it will acquire L3Harris' Military Training business for US$1.05 billion.
The acquisition value represents approximately 13.5 times the L3Harris Military Training business estimated adjusted 2020 earnings (EBITDA). 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 L3Harris Military Training business includes Link Simulation & Training, Doss Aviation and AMI. L3Harris Link is a provider of military training solutions in the United States; Doss Aviation is the provider of initial flight training to the US Air Force; and AMI is a design and manufacturing facility for simulator hardware.
The L3Harris Military Training business will operate under CAE USA, headquartered in Tampa, Florida.
"L3Harris Military Training will bring significant experience in the development and delivery of training systems for fighter and bomber aircraft, Army rotary-wing platforms, submarines and remotely piloted aircraft," CAE said in a statement. "L3Harris Military Training will also bring a significant backlog and position on key programs, including the USAF Simulators Common Architecture Requirements and Standards (SCARS) program, USAF F-16 Simulators Training Program (STP), US Navy/Marine Corps F/A-18 aircrew training systems, USAF Ground Based Strategic Deterrent (GBSD) training and USAF B-2 training system."
"This proposed transaction will provide greater balance to CAE across businesses and geographies, and like our recent acquisitions in the civil aviation market, it demonstrates our focus on bolstering and expanding our position in the markets we serve," said Marc Parent, CAE's President and CEO said.
"With annual revenues of approximately US$500 million in 2020, L3Harris Military Training brings scale and capabilities that support our imperative to align closely with the National Defense Strategy in the United States," Dan Gelston, Group President, Defence & Security, CAE said. "We expect increasing demand for simulation-based training and the use of synthetic environments across multi-domain operations. This acquisition will further support CAE in providing those vital digitally immersive solutions for training and operational support.
"We look forward to welcoming the team at L3Harris Military Training as we grow CAE and position the company to support the mission of our defence and security customers."
L3Harris Military Training is CAE's fourth announced acquisition in the past four months.