1/5/2015
HEADLINES
B/E Aerospace Spinoff Creates New Fastener Company KLX
B/E Aerospace completed its spinoff of aerospace fastener distributorship formerly known as B/E Aerospace Consumables Management.
The new company, KLX Inc., began trading on the NASDAQ under the ticker symbol “KLXI”.
KLX begin operating as KLX Aerospace Solutions starting January 1, 2015.
B/E Aerospace immediately traded 25% lower to account for the spinoff of KLX, as the shares will no longer reflect the value of the new stand-alone company.
B/E Aerospace was trying to shop the company around to potential buyers when it decided in June to spin-off its Consumables Management business – primarily fasteners.
KLX sells fasteners and other consumable products to over 4,700 global customers using “the broadest and deepest product portfolio in the world with over one million SKUs valued at over $1 billion.”
KLX serves as distributor for every major aerospace fastener manufacturer by using its $100 million proprietary IT systems. The company has an established presence in such locations as the United Arab Emirates, Australia, China, Singapore, India, Germany, Mexico and Italy.
Consumables Management operates a 62,000 sq ft manufacturing facility in Bridgeport, West Virginia, along with seven distribution centers in the U.S, two in Germany, two in the UK, and one in France.
In connection with the spin-off, long-time chairman and co-CEO Amin Khoury stepped down from those rolls in B/E Aerospace. Werner Lieberherr replaced Khoury as CEO of B/E Aerospace, according to SEC documents.
Khoury now serves as executive chairman of B/E Aerospace and chairman and CEO of KLX. Khoury’s pay would be reduced by more than 50%, including a reduction in annual retirement benefits to $900,000 per year, in exchange for deferred cash payment.
In addition, B/E Aerospace CFO Thomas McCaffrey serves as president and COO of KLX.
B/E Aerospace has named Michael Senft as VP, CFO and Treasurer ofKLX.
KLX is located at 1300 Corporate Center Way, Wellington, Florida 33414-2105. Tel: 561 383-5100
During 2015, KLX will spend approximately $20 million related to branding, recruiting, relocation, business repositioning, and other related expenses associated with post spin-off activities.
B/E Aerospace reported third quarter consumables management segment (CMS) revenues – primarily fasteners – increased 41.4% to $448.7 million, boosted by acquisitions. Segment operating earnings rose 35.4% to $81.9 million, and operating margin totaled. 18.3%.
Nine-month Consumables revenue climbed 29.8% to $1.24 billion, while operating earnings increased 23.9% to $231.3 million.
In 2008 B/E Aerospace acquired Honeywell’s aerospace fastener distribution business, Honeywell Consumable Solutions, for $1.06 billion, transforming B/E Aerospace into one of the largest distributors of aerospace fasteners in the world.
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