Airbus Group has reached agreement with global investment firm, KKR, to sell its defence electronics business (Defence Electronics).
Defence electronics is a global provider of mission-critical sensors, integrated systems and services for premium defence and security applications based in Ulm, Germany.
The move is part of a portfolio reorganisation announced by the Airbus Defence and Space Division in September 2014. The transaction is expected to close in the first quarter of next year and is subject to customary closing conditions, including regulatory approvals and employee consultation.
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Bernhard Gerwert, chief executive officer of Airbus Defence and Space, commented: “This is an excellent outcome for our Orlando process which aimed at repositioning Defence Electronics for the future with an excellent outcome for all stakeholders.
“Defence Electronics is a strong, profitable business with significant growth potential and we are convinced that KKR and the Defence Electronics management team and employees will continue to strongly develop the business going forward.”
KKR has valued the defence electronics business at an enterprise value of approximately € 1.1bn. Airbus Group may maintain a minority stake to ensure a smooth and seamless transition for the business, its employees and partners.
Johannes Huth, member and head of KKR Europe, Middle East and Africa, said: “We are delighted to have been chosen as the best partner for the defence electronics business. KKR will support the growth and development of the company with its financial resources, international network, long-standing expertise in the global industrial sector and its extensive experience building successful industrial companies in Germany, such as MTU Aero Engines, Demag Cranes and Kion.”
Defence Electronics includes around 4,000 employees worldwide, with annual revenues of around €1bn.
The perimeter of the new company comprises military sensors, electronic warfare, avionics and optronics. Since January 2016, the unit has operated under the management team as one business within Airbus Defence and Space.