B/E Aerospace to split into two publicly traded companies


B/E Aerospace Inc, an aircraft seat maker and parts distributor, will split into two publicly traded companies, making it easier for the company to pursue a sale of its businesses.

The $10 billion company - which with Zodiac Aerospace controls around 70 percent of the world's aircraft seats market - made a surprise announcement in May that it was considering selling itself, among other strategic alternatives.

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"As two standalone entities, it could theoretically make it easier for a potential acquirer to make a bid without having to worry about the other half of the business," RBC Capital Markets analyst Robert Stallard wrote in a note on Tuesday.

B/E Aerospace said one company would focus on design, manufacturing and direct sales of aircraft cabin products, while the other would concentrate on distribution, logistics and technical services for aerospace and energy services markets.

German aircraft seating maker Recaro said in May that it was looking at buying assets from B/E Aerospace.

Asked then if it would bid for B/E Aerospace, Zodiac Aerospace had declined to comment. Analysts, however, had said Zodiac Aerospace could not be considered a potential bidder due to B/E Aerospace's size.

Other companies such as General Electric Co, United Technologies Corp and Honeywell International Inc , which have the size to bid for B/E Aerospace, have already announced different capital plans.

B/E Aerospace said the separation was likely to be completed in the first quarter of 2015 and that its strategic review would continue.

The 26-year-old company also named former Honeywell chief financial officer David Anderson to its board.

B/E Aerospace's shares fell 3 percent to $96.08 in premarket trading on Tuesday. The stock has risen about 11 percent since the company said on May 4 that it was looking to sell itself.

"Recent investors in B/E's stock likely would have preferred an outright sale of the company," Cowen & Co analyst Gautam Khanna wrote in a note.

B/E Aerospace also raised its profit forecast for the year ending Dec. 31 to $4.35 per share from $4.30 per share.

Analysts on average were expecting $4.39 per share, according to Thomson Reuters I/B/E/S.