L3Harris Technologies [NYSE:LHX], the aerospace and defense company, is collecting initial bids in early August for the divest of a package of avionics assets, said three sources familiar with the matter.
The assets being sold have USD 100m to USD 150m in EBITDA, the three sources and a fourth source familiar said.
Melbourne, Florida-based L3Harris is working with financial advisor Morgan Stanley on the divest, as reported by this news service earlier this month. Two of the sources said there is another adviser mandated as well, with one of the sources saying it is Moelis.
The assets being sold include commercial avionics and commercial flight training businesses, said two of the sources and a fifth source familiar with the matter. Two of these sources said L3Harris is aiming to sell the package as a whole, not in parts. L3Harris is conducting a narrow process, with only strategics being invited up to this point, two of the sources said.
L3Harris' immediate focus was on getting its acquisition of Aerojet Rocketdyne [NYSE:AJRD] done, as reported. In a 26 July regulatory filing, L3Harris said that it expects to close the deal on or around 28 July. This was after a report by this news service saying that L3Harris and Aerojet Rocketdyne are expecting to close their USD 4.7bn deal as early as this week. In December, L3Harris agreed to acquire the propulsion systems maker for USD 58 per share.
If L3Harris ends up selling its avionics business, the sale proceeds are expected to be used to shore up its balance sheet after the Aerojet deal, as reported. L3Harris has been keen on getting rid of non-core assets, it was further reported.
L3Harris wants to become a sixth prime defense contractor joining the five in the US market: Lockheed Martin [NYSE:LMT], Northrop Grumman [NYSE:NOC], Boeing [NYSE:BA], Raytheon [NYSE:RTN] and General Dynamics [NYSE:GD], as reported.
L3Harris has a market capitalization of USD 36bn.
L3Harris, Morgan Stanley and Moelis declined to comment.
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