On Thursday, L-3 Communications Holdings, Inc. (NYSE:LLL) announced that it had entered into a contract to acquire CTC Aviation Group.
The defense company said that the deal to acquire the commercial pilot trainer was worth $220 million. The newly acquired firm is now known as L-3 CTC Ltd. L-3 claims that they expect immediate results to start pouring in. The company anticipates sales gains in upwards of $50 million from the new acquisition by the end of the year.
Analysts estimate that L-3 to make $11.6 billion in total revenue for 2015. L-3 CTC specializes in pilot and crew training. The company operates on a global scale and provides its services to retail clients and major airline companies.
L-3’s Chief Executive Officer, Michael Strianese described the procurement as a decent fit for the company to push its expansion strategies as it looks to improve its the international presence. He also added that the firm has to consider higher scale businesses to make sure it improves its profitability.
Since 2010, the company’s international scene and profitability margins have gone up by 30%, an improvement from a previous low of 20%. L-3 has been competing for contracts with the government. The company continues to receive more recognition and does not plan to stop there.
L-3 Communications Holdings, Inc. (NYSE:LLL)’s new acquisition is a strategic plan that the company hopes will go a long way in pushing their goal to expand their operations in the global scene. It is an investment decision that seems to have been carefully thought through. The firm has received a lot of recognition from its past acquisition decisions. L-3 recently announced that it would consider letting go of its marine systems venture that has not been performing as per expectations.
The Marine Systems trade is one of the sections of the firm’s commercial and international divisions. Abandoning it will not only reduce the costs but will also give the company more room to venture into other potentially lucrative ideas. This will allow the firm to make a solid stand. It will also add up as one of the measures that will necessitate progress and the achievement of company goals.
