The Boeing Company
) continues with its systemic acquisition program. The company
announced that it has acquired Dutch firm AerData Group B.V.
(AerData") for an undisclosed amount. AerData is the second
technology company that the aerospace behemoth has agreed to buy in
less than a week. The market reacted positively to the news and the
share price edged up 1.3% to $134.17 on May 27, 2014 from last
Schiphol, the Netherlands-based AerData offers integrated software
solutions for lease management, engine fleet planning, records
scanning, and several technical and back-office services for
different parties, including aircraft and engine operators, lessors
and maintenance, repair and overhaul (MRO) service providers. The
company has a wide array of products - CMS lease and asset
management software, EFPAC engine management system, EFPAC engine
management system and many more. Apart from the Netherlands, the
company has presence in the U.K., the U.S. and Ireland.
Post transaction, the products and services of AerData will be
integrated into the company's Boeing Edge business. Boeing Edge, a
part of the company's Commercial Airplanes division, provides a
suite of aviation services including parts, training, engineering,
and maintenance and software solutions to airlines and leasing
The AerData acquisition will enable Boeing to offer better quality
devices, which will help the airlines and leasing companies to
manage complex maintenance records. As AerData has a significant
presence in the airline and leasing industry and has business
alliance with the flag carrier airlines of the Netherlands
Koninklijke Luchtvaart Maatschappij N.V. (KLM), Emirates, Air New
Zealand, Dragon Aviation Leasing and Rolls-Royce, the acquisition
will expand Boeing's product offering besides increasing the
customer base. AerData on the other hand will gain access to
Boeing's vast global support network.
Recently, Boeing inked another deal to boost its Boeing Edge
capabilities. On May 23, the company announced that it has agreed
to acquire U.K.-based ETS Aviation (ETS). ETS primarily provides
fuel-efficiency management and analytics software. The transaction
is scheduled to be completed in second-quarter 2014.
Boeing has a strong customer base in Europe. Leveraging on existing
footprint, the back-to-back acquisitions of Dutch and British
technology firms will further enable Boeing to strengthen its
operations in the mainland European market. Boeing's Commercial
Airplane division is also geared up to meet the growing demand from
the Asian countries.
Boeing maintains a stable cash position backed by strong cash
generation capacity. As of Mar 31, 2014, the company's cash balance
was around $6.94 billion. In the first three months of 2014,
operating cash flow jumped 112.2% to $1.1 billion from the
prior-year level. A strong financial position supports Boeing's
steady inorganic growth initiatives.
Boeing currently carries a Zacks Rank #3 (Hold). However, some
better-ranked stocks in the aerospace and defense sector include
Huntington Ingalls Industries, Inc.
). While Embraer SA carries a Zacks Rank #1 (Strong Buy),
Huntington and CAE hold a Zacks Rank #2 (Buy).
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