Spar Aerospace has accepted an acquisition offer from L-3 Communications of New York. The Canadian company is being bought for C$230 million ($147 million).
The deal acquiring aviation services provider Spar is a departure for L-3, which is best known as a supplier to aerospace, military and commercial primes.
Toronto-based Spar had planned to triple the size of its C$74 million business over three years, partly through acquisitions. But it has decided to give up its independence due to worsening economic conditions in the aerospace sector. Talks began before the terrorist attacks in the USA.
Spar says being bought by L-3, with its $1.9 billion turnover, will enable it to better compete internationally. It expects increased business on the defence side which accounts for about 70% of its sales, but feels its commercial aviation arm will decline due to the sector downturn. The Canadian company has transformed itself in recent years, selling its space and communication activities to concentrate on aircraft and component servicing.
L-3 plans to broaden Spar's activities in the US defence sector while tapping into Spar's strong international business such as upgrading and maintenance of Lockheed Martin C-130s. The company provides support for a number of Canadian armed forces contracts.
Source: Flight International
