Aerospace & Defense

B/E Becomes the Next Likely Aerospace Buyout Stock

B/E Aerospace, Inc. (NASDAQ: BEAV) has enjoyed a nice growth trajectory over the years, outfitting cabin interiors for the world’s airplane fleets. Now it is worth about $9.4 billion, and it could be the next buyout in aerospace suppliers. The company announced over the weekend that it is engaged in a process to explore and evaluate strategic alternatives involving the company and its respective businesses. The key — to enhance shareholder value.

The most important wording here is in the “how” of the process. B/E Aerospace said that these strategic alternatives could include a possible sale or merger. Other alternatives named were the sale, spin-off or other separation of selected businesses within B/E or other strategic transactions involving the company or its businesses.

B/E Aerospace has retained Citigroup as its financial advisor. Its legal advisor in connection with this process is Shearman & Sterling LLP.

Investors of course have to understand here that the company said no decision has been made and there can be no assurance that exploration of strategic alternatives will result in any transaction being entered into or consummated. B/E Aerospace also warned that no timetable has been set for completion of this process and that the company does not intend to discuss or disclose further developments of this process.

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As a result of this process, the company has decided that it will not hold its investor meeting scheduled for Monday.

B/E Aerospace’s expected earnings in 2014 are $4.39 per share and revenues are expected to be $4.1 billion. The stock closed Friday at $88.96 and is up 2.2% in 2014. The consensus price target from Thomson Reuters, without respect of the exploration of strategic alternatives, is $100.46. The range of values from Wall Street analysts is $90 to $111 for this stock.