Safran has announced the contemplated acquisition of Collins Aerospace’s high-technology actuation and flight control business, which is mission critical for commercial and military aircraft and helicopters.
The business has around 3,700 employees across eight facilities in Europe and in Asia, and also benefits from MRO and engineering capabilities. It is expected to generate sales of approximately $1.5 billion and an EBITDA of $130 million in 2024.
Olivier Andriès, chief executive officer of Safran, commented, “The contemplated transaction represents a unique opportunity to develop our position in mission critical actuation and flight control functions. Our highly complementary product offerings would create a global leader in these segments with around $1.8 billion of sales. The transaction would enable us to deliver a comprehensive offering to our clients and position us extremely well for next-generation platforms as the segments move toward increased electrification. The business is a perfect fit with both our product portfolio and our DNA with leading technologies, recurring aftermarket sales, and profitable growth.”
Business value
The transaction is expected to generate approximately $50 million of annual pre-tax run-rate cost synergies, which would be progressively implemented from 2025 to 2028. Such synergies would notably come from economies of scale in procurement, R&D complementarity, internalization of sourcing and production flows.
In addition, commercial synergies would be obtained through integrated offerings and a diversification of customers and geographic mix. Commercial synergies would continue post 2028 with run-rate achieved on next-generation aircraft by the middle of the next decade.
As part of the contemplated acquisition, long-term supply agreements would be secured between Safran and Collins at attractive terms. The transaction is expected to be fully financed with available cash, with a limited impact on the Group’s net leverage and a reiterated commitment to the robust Group’s investment grade rating.
