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B/E Aerospace Will Split in Two

NEW YORK (The Deal) -- B/E Aerospace (BEAV) said Tuesday it will split into two independent companies, part of a strategic review kicked off last month in the face of potential pressure from activists.

Wellington, Fla.-based B/E said that its board had commenced the process of separating its distribution and logistics arm from its business manufacturing aircraft seating and other cabin interior equipment. The company called the split "an important step" in its review process but hinted that further actions could follow, saying the board is continuing to "aggressively pursue" other steps to enhance value.

"This decision reflects B/E's ongoing commitment to optimize the distinct needs of each of our businesses and the company's strategic priorities, consistent with our focus on driving shareholder value," company chairman and CEO Amin Khoury said in a statement.

Post-split Khoury said that each company would have more flexibility to determine optimal capital structure, free cash flow allocation and growth strategy.

The distribution business would rank as one of the world's largest providers of aerospace fasteners, consumables and logistic services to the airlines and manufacturers as well as energy firms and other verticals, generating about $365 million in Ebitda on sales of $1.6 billion in the twelve months ending March 31.

The interiors unit meanwhile recorded revenue of $2.5 billion and Ebitda of about $510 million during the same period. Khoury during a conference call said that either company could be either an acquirer or a target in the quarters to come.

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