It marks a further shift from government contracts to the commercial sector for Rockwell Collins, with commercial work now representing 54 per cent of the company’s business. The shift has been largely necessitated by cutbacks in US defence spending.
"Strategically, this acquisition is a natural fit for Rockwell Collins,” commented CEO and president Kelly Ortberg. “It accelerates our strategy to develop comprehensive information management solutions by building on our existing information-enabled products and systems and Arinc's ground–based networks and services to further expand our opportunities beyond the aircraft.”
The acquisition certainly brings Rockwell Collins out of the cockpit, and extends its reach significantly, with Arinc “broadly touching the entire aviation eco-system”, including pilots, operators, maintenance, passengers, controllers, regulators, security, and airport operations, according to the companies. Ortberg, who only became CEO on August 1, added that he expected Rockwell Collins to “benefit from greater earnings consistency throughout the commercial aviation business cycle”.
The information management sector, including next-generation air traffic control (ATC) systems and in-flight connectivity and communications, is certainly growing and becoming of increased interest. Indeed, Arinc’s 2013 revenues are expected to be in excess of $600m.
For its part, Arinc believes the marriage of the two companies’ offerings will give customers a unique new service. “Rockwell Collins’ expertise in managing information onboard the aircraft, coupled with our innovative and reliable air-to-ground communications services, will be instrumental in providing new integrated information management solutions for our customers,” explained chairman and CEO John Belcher.
The definitive agreement is still dependent upon receipt of regulatory approvals and other customary conditions, but at $1.39bn represents the largest aerospace deal in the US this year.