L-3 Communications Acquires Aerosim For Undisclosed Value

L-3 Communications Holdings Inc. (NYSE:LLL) has completed the acquisition of Aerosim in a transaction that covers Burnsville, MN-based Aerosim Technologies, Inc. and Sanford, FL-based Aerosim Flight Academy, Inc.

Details of the Transaction

The deal was completed on Sep 30. Financial terms of the acquisition were, however, kept under wraps.

Aerosim will be integrated into the L-3 Commercial Training Solutions (“L-3 CTS”) division of the company’s Electronic Systems segment and will thereafter be known as L-3 Aerosim-CTC.

Benefits of the Deal

Aerosim will enhance L-3 CTS' pilot training capability for existing training operations in Phoenix, AZ, as well as the UK, Thailand and New Zealand. It will also provide training product capabilities that complement L-3 CTS’ existing suite of RealitySeven Full Flight Simulators and Flat Panel Trainers.

It has been estimated that by 2017 end, Aerosim will contribute about $50 million to L-3 Communications’ top line, thereby providing accretion to L-3 Communications’ bottom line.

L-3’s Take on the Deal

According to Michael T. Strianese, L-3 Communications’ Chairman and Chief Executive Officer, the acquisition will add value to its portfolio and boost its growth strategy in key markets. The transaction is also projected to improve the company’s training, resourcing and simulation solutions as Aerosim’s business is a synergistic fit for L-3 Communications’ growing portfolio of personalized solutions.

Zacks Rank & Key Picks

L-3 Communications currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the aerospace and defense space include Engility Holdings, Inc. (NYSE:EGL) , AAR Corp. (NYSE:AIR) and General Dynamics Corporation (NYSE:GD) .

Engility’s shares witnessed a 3.0% rise in its stock price in the past one month. On an average, the company has delivered a positive earnings surprise of 12.09% in the trailing four quarters. Engility sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AAR Corp also sports a Zacks Rank #1 and the company has witnessed a 9.6% upside in its stock price over the past one month. This company’s 2016 earnings estimates improved 5% in the last 30 days.

General Dynamics carries a Zacks Rank #2 (Buy). The stock has gained 10.9% in its last three months. On an average, the company has delivered a positive earnings surprise of 6.54% in the trailing four quarters.

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