B/E Aerospace (
BEAV) appears to be
making significant progress on the upcoming spinoff of its consumables management segment, KLX inc. The company recently
filed an initial Form 10 and while I haven’t had a chance to read through the entire document, it seems like the ‘Energy Technical Services’ segment is going to be a bigger focus for the new company. Although still small as a percentage of revenue, there is a lot of discussion about the group and B/E Aerospace has made a bunch of small acquisitions in the space in order to boost its size. The ETS group provides ‘technical and logistics services and related rental equipment to oil and gas exploration and production companies…brings value- added resources to a new customer base, often in remote locations.’ Its customer base appears to be mostly North American oil field and shale locales. Shale is certainly exciting, but is it late in the game to enter? While an interesting segment, the majority of the spinco’s revenues are expected to be generated by the ‘Aerospace Solutions Group’, which is ‘the world’s leading distributor and value-added service provider of aerospace fasteners and consumables.’
Although not finalized, the Form 10 did reveal some important information about KLX’s executive team:
Although we have not yet finalized the selection of our executive officers who will serve as such following the spin- off, we expect that Amin Khoury, the current Chairman and Co- Chief Executive Officer of B/E Aerospace, will serve as our Chairman and Chief Executive Officer following the spin- off, and Tom McCaffrey, the current Chief Financial Officer of B/E Aerospace, will serve as our President and Chief Operating Officer following the spin- off. It is expected that Mr. Khoury will serve in the role of Executive Chairman of B/E Aerospace following the spin- off. We will finalize the selection of our executive officers prior to the spin- off…
It’s always worth noting whenever a company’s leadership team decides to jump over to the spinco and in this case both the Chairman/CEO and CFO are doing just that. I guess they see a lot of potential there.
KLX is expected to be listed on the NASDAQ under the ticker ‘KLXI’ and the spin is expected to be completed sometime during Q1 2015.
Disclosure: Author holds no position in any stock mentioned.