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B/E Aerospace Inc. Message Board

  • bellbell63 bellbell63 Jun 2, 2014 9:34 AM Flag

    Forget any sale

    Looks like they are buying not selling. Adding two more companies makes any deal more complicated and less likely. IMO headed back down to high eighties.

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    • Bell

      These transactions for EMTEQ and FE Fischer are small deals. Only $ 470 million for both firms.
      Combined annual revenues of $ 150 million. Too small to have a meaningful impact on the BEAV
      business.

      Best thing from this deal announcement is that large institutionls have redirected Koury back into
      the aero interiors business.

      National Oilwell Varco recently spun off its energy distribution businesses into a totally new
      firm called NOW. If BEAV could sell its orphan energy assets to either NOV, NOW or HAL
      it would help refocus BEAV more tightly into its prime aero business.

      Buying EMTEQ & Fischer and selling the energy assets would be approx a net wash.
      $ 500 million out and $ 500 million received

      Either way energy and these deals are "small potatoes" for BEAV. Given the small size
      I am not so sure that "no further deals/sales" can be arrived upon from this news ......I don't
      think large activist investors would waste their time to push for a small fringe deal and then
      be content that their work is done.

      Koury has to do more at BEAV to keep his job .......this thing ain't over yet.

      • 1 Reply to jackmaster20
      • " Buying EMTEQ & Fischer and selling the energy assets would be approx a net wash.
        $ 500 million out and $ 500 million received"

        But they haven't sold so it just raises the cost to a buyer by that $500M. Does a buyer want the added task/nuisance of integrating 2 new companies?

        In general I think BEAV is a hard sell due to it's valuation - high for it's industry and PE not cheap. Buyer like acquistions to be accretive and high PE makes that difficult.

        I think their buying stuff is a realization that they are in a industry where it is difficult to increase organic growth. Not like HD where you can open new stores - you are dependent upon airline industry health. So alternative is M&A growth. Right now BEAV looks a bit bi-polar to me.

 
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