Aug. 12--The Annapolis-based aerospace technology firm Arinc, Inc., which employs hundreds of people in Anne Arundel County, will be sold for $1.39 billion under an acquisition agreement announced Sunday.
The Cedar Rapids, Iowa-based aviation equipment supplier Rockwell Collins Inc. said the deal to purchase Arinc from the Carlyle Group LP will "bring together two leading players in the growing field of aviation information management, combining ARINC's trusted networks and services with the industry leading avionics and cabin technologies developed by Rockwell Collins."
What effect the sale would have on Arinc's 900 or so employees in Anne Arundel County was not immediately clear. The deal still must be approved by regulators.
The news follows a bidding process undertaken by the Carlyle Group, which has been looking to sell Arinc. Arinc provides engineering and communications systems for the government and defense industry. Founded in 1929, it was acquired by Carlyle in 2007 from a group of airlines.
Carlyle had tried to sell Arinc in 2010 as well, but those efforts stalled in part over concerns that Arinc's government contract bidding and its government consulting services presented a conflict of interest.
Late last year, that conflict was addressed when Arinc's Defense Systems Engineering & Support division was sold to Booz Allen Hamilton Holding Corp. for about $154 million, and about 1,000 Arinc employees were expected to join Booz Allen.
Rockwell Collins, which has 19,000 employees, says it specializes in "flight deck avionics, cabin electronics, mission communications, information management, and simulation and training," and the purchase of Arinc will help diversify its holdings -- decreasing its government contracts to 46 percent of business.
Arinc, with 2013 revenues expected to break $600 million, has regional headquarters in Singapore and London to serve customers in Asia and the Middle East, as well. It provides communications systems across the field of aviation but also in rail, industrial security and public safety fields.
"ARINC's strong customer base, high customer retention rates and subscription business model will help the company achieve accelerated growth and benefit from greater earnings consistency throughout the commercial aviation business cycle," said Kelly Ortberg, Rockwell Collins' president and CEO, in a statement.
Ortberg is expected to publicly discuss the deal at 9:30 a.m. Monday.
Arinc Chairman and CEO John Belcher said in a statement that his company is "excited to be joining a company who shares our vision and focus on providing trusted solutions for our customers."
He added: "Rockwell Collins' expertise in managing information on-board the aircraft, coupled with our innovative and reliable air to ground communications services, will be instrumental in providing new integrated information management solutions for our customers."
Belcher and his wife Cathy, of Edgewater, are well known in Anne Arundel, in part because of their philanthropic donations.
Earlier this summer, the couple pledged at least $11 million to Anne Arundel Medical Center in the largest bequest ever made to the hospital. A total of $1 million will go to the hospital in the next several years, and at least $10 million will go to the hospital after the couple's deaths when their estate is liquidated.
John Belcher is a member of the hospital's board of trustees and past chair of its foundation board of directors.
In the face of looming federal budget cuts, Gov. Martin O'Malley chose the headquarters of Arinc in February to talk about the state's need to capitalize on nearby federal agencies by driving the companies that rely on federal contracts to fuel innovation.
Arinc was also one of three equipment makers that joined Washington's Metro last year in admitting liability in the deadly June 22, 2009 train crash that killed nine people and left dozens injured. The companies said they did so to avoid the risks and costs of litigating the case.
Following the crash, Arinc worked with the Metro system to upgrade its control systems to prevent train collisions.
Reuters contributed to this article.
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