L3Harris Technologies To Sell Commercial Aviation Solutions Unit To TJC In $800 Mln Deal

On Monday, L3Harris Technologies made a significant announcement, revealing its intention to offload its commercial aviation business to a private-equity firm affiliate for a sum that could reach $800 million. The move is part of a strategic initiative by L3Harris to alleviate its debt burden and sharpen its focus on national security and technology endeavors.

The decision to sell its Commercial Aviation Solutions unit to TJC, a New York-based private-equity firm, comes on the heels of L3Harris recent $4.7 billion acquisition of Aerojet Rocketdyne, an engine and propulsion firm, which was finalized four months ago.

Christopher Kubasik, the CEO of L3Harris, emphasized the deal role in expediting the company progress toward achieving its targeted debt load. Kubasik stated, "Today announcement is consistent with our multi-year strategy to optimize our national security, technology-focused portfolio. 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."

The anticipated completion of the deal is set for the first half of 2024, pending regulatory approval. L3Harris refrained from providing additional comments beyond the information contained in its official release, and TJC, the private-equity firm, has yet to respond to requests for comment.

The commercial aviation business of L3Harris employs approximately 1,450 individuals, offering a range of services such as pilot training courses, flight data analytics, avionics, and advanced air mobility solutions.

TJC, formerly known as The Jordan Company, is a middle-market private-equity firm.

L3Harris disclosed that the deal might encompass its surveillance joint venture, with the sale contingent on a right of first refusal. If exercised, the TJC affiliate would acquire the remaining portion of the commercial aviation business. As part of the agreement, L3Harris is set to receive $700 million in cash and an additional $100 million earnout based on financial performance targets for 2023 and 2024.