Barco to Sell its Defense and Aerospace Business to Esterline Corp
Published By : 30 Sep 2014 | Published By : QYRESEARCH
Barco NV, the Belgian visual technology company, has announced its decision of selling its defense and aerospace business unit to U.S. organization Esterline Corporation in a deal worth U.S. $190 million.
An official statement from Barco stated that the deal is expected to close in the next three to four months, and that it would allow the company to focus more on its core competency areas such as the manufacturing of high-end imaging systems for power utilities and healthcare companies and digital camera projectors.
The company added that it will utilize the funds obtained from this deal in increasing its global appearance in its core fields.
Esterline Corporation, an aerospace and defense manufacturer from Bellevue, Washington, would be able to expand its presence in Europe with this deal. With manufacturing units located in Britain and Germany in Eurpoe, the company operates in Europe via its European headquarters in Versailles, France.
Barco’s defense and aerospace unit employs nearly 600 people and develops displays for cockpits, flight simulators, air traffic control, screens that can be used by the military in hostile conditions, and rugged work stations. It posted a 10.5% reduction in sales the last year and a core profit margin of 13.5%.
Barco had been stating for at least a year that it plans to sell the business for a correct price.
Defense and aerospace unit is a relatively small market player and is dominated by U.S. companies quite often. Barco has also struggled to operate under stringent cost margins as government budget cuts are pressing prices.
Chief Executive Eric Van Zele of Barco said that the company’s defense business unit would be better placed under a U.S. owner.