Honeywell’s acquisition of Com Dev has closed after clearing its last major hurdle, with shareholders in the Canadian space hardware maker overwhelmingly in favour of the sale.
Honeywell’s (NYSE:HON) acquisition of space hardware maker Com Dev (TSX:CDV) has closed after clearing its last major hurdle.
Investors in the Canadian target overwhelming approved Honeywell’s C$455m (US$332m) offer, with 74.4% of Com Dev shareholders exercising their right to vote and 99.3% in favour of the proposal.
Following the approval, the Ontario Superior Court of Justice rubber-stamped the arrangement, allowing the companies to close on 4 February, almost exactly three months after the deal was first announced.
Commenting on the completion, Honeywell CEO Tim Mahoney (pictured) said: “Com Dev extends Honeywell’s connectivity push with proven satellite component technologies and access to international customers that align with our current space portfolio and growth strategies.
“Combined, Honeywell and Com Dev offer commercial and government customers access to one of the broadest space satellite equipment portfolios in the industry.”
Under the terms of the merger, the US aerospace giant will pay an initial C$5.125 for each Com Dev share and the shareholder will also receive 0.1977 of a share in exactEarth, the maritime tracking network which will now be spun-off from Com Dev as part of the deal.
Com Dev investors could later get up to C$0.125 for each of their Com Dev shares, depending on how well exactEarth’s stock trades following the spin-off. ExactEarth is 73%-owned by Com Dev with the remaining equity held by Spanish state-owned services operator Hisdesat, and these stakes will not change following the initial listing.
The Honeywell deal came three months after exactEarth postponed an IPO on the TSX due to challenging market conditions following a strategic review led by Canaccord Genuity, which then moved to advise Com Dev on its sale to Honeywell. Honeywell did not use an adviser.
Before the deal was agreed with Honeywell, Com Dev had reportedly approached companies including Comtech Telecommunications, Honeywell International, L-3 Communications and Thales about a transaction.
Inflight okay from FAA
The finalisation of the Com Dev takeover follows Honeywell’s receipt of a key approval for its inflight broadband hardware.
The US Federal Aviation Administration has certified Honeywell’s JetWave wireless inflight connectivity system to be installed on the Boeing 757. JetWave connects to Inmarsat’s (LON:ISAT) high-speed satellite broadband network Global Xpress, which as of late December covers the entire globe.
The hardware was tested for more than 180 flight hours at various altitudes, angles and speeds, and in different weather conditions.
Leo Mondale, president of Inmarsat Aviation, noted that airlines had previously struggled to meet passenger expectations for a high-speed inflight broadband experience, but said GX Aviation would mark “a turning point”.
“The certification of Honeywell’s JetWave hardware is a key milestone in the program and we congratulate our partner on this achievement,” he said.
