Boeing acquires aerospace spare parts maker KLX Inc for $3.2 billion

The strategic acquisition, aimed at garnering more revenues from the higher-margined spares parts and airplane services industry, does not significantly impact its 2018 guidance or its capital deployment strategy.

On Tuesday, in a move aimed at expanding its aircraft services business, U.S. planemaker Boeing Co stated it would acquire KLX Inc, an aerospace parts manufacturing company, for around $3.2 billion in cash.

The deal provides KLX a valuation of $4.25 billion, which includes $1 billion in net debt.

The development comes in the wake of Dennis Muilenburg, Boeing’s CEO stating last week that its services growth would be complemented by strategic acquisitions.

Boeing has reaffirmed that the deal does not materially impact its capital deployment strategy and that there is no change in its 2018 guidance. It expects an annual cost savings of around $70 million by 2021 from this deal.

In 2017, Boeing launched a services business and in February 2018 it announced deals worth nearly $1 billion.

All of these moves are aimed at capturing the higher-margin services and spare-parts revenues that flow once a plane is sold.


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