L3Harris Technologies announced the signing of a definitive agreement under which an affiliate of TJC L.P. will acquire L3Harris’ Commercial Aviation Solutions (CAS) business for $800 million.
The acquisition includes a $700 million cash purchase price and $100 million earnout based on the achievement of certain 2023 and 2024 financial performance targets, which together represent an approximate 15x LTM 9/30 EBITDA purchase multiple. The transaction is expected to close in the first half of 2024 and is subject to customary closing conditions and regulatory approvals.
“Today’s announcement is consistent with our multi-year strategy to optimize our national security, technology-focused portfolio,” said Christopher E. Kubasik, Chair and CEO, L3Harris.
“Aligned with our capital allocation priorities, we plan to use the proceeds from this transaction to repay debt, which will accelerate our timeline to reach our debt leverage objective,” he added.
The CAS transaction includes the sale of L3Harris’ surveillance joint venture and is subject to a right of first refusal; if exercised, an affiliate of TJC L.P. will acquire the rest of CAS.
L3Harris’ CAS business employs approximately 1,450 people and offers pilot training, flight data analytics, avionics, and advanced air mobility products and services, among other capabilities.
Morgan Stanley & Co. LLC and Moelis & Company are serving as financial advisors to L3Harris, and Sullivan & Cromwell LLP is serving as legal advisor. J.P. Morgan Securities LLC is acting as financial advisor, and Kirkland & Ellis LLP is serving as legal counsel for TJC L.P.
L3Harris Technologies is the Trusted Disruptor in the defense industry. With customers’ mission-critical needs always in mind, our nearly 50,000 employees deliver end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security.
TJC L.P. (formerly known as The Jordan Company), founded in 1982, is a middle-market private equity firm that has raised funds with original capital commitments in excess of $22 billion and has a 41-year track record of investing in and contributing to the growth of many businesses across a wide range of industries including Diversified Industrials; Technology, Telecom & Power; Logistics & Supply Chain and Consumer & Healthcare. TJC has offices in New York, Miami, Chicago and Stamford.