Shares of L3harris Technologies (NYSE:LHX) are trending marginally lower today after the defense major agreed to sell its commercial aviation solutions (CAS) business to middle-market private equity firm TJC for $800 million.
The transaction involves a cash component of $700 million and a $100 million earnout contingent on the achievement of certain financial performance targets. The company’s CAS business offers pilot training, avionics, advanced air mobility products, and flight data analytics.
Christopher E. Kubasik, the Chair and CEO of L3Harris, commented, “Today’s announcement is consistent with our multi-year strategy to optimize our national security, technology-focused portfolio. Aligned with our capital allocation priorities, we plan to use the proceeds from this transaction to repay debt, which will accelerate our timeline to reach our debt leverage objective.”
The deal is subject to closing conditions and is expected to close in the first half of next year.
What is the Target Price for LHX?
Overall, the Street has a Moderate Buy consensus rating on L3Harris Technologies. Following a nearly 10% rise in the company’s share price over the past month, the average LHX price target of $208.07 implies a modest 9% potential upside.
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