Boeing Co. is boosting its bet on a new services division with Chief Executive Officer Dennis Muilenburg’s biggest deal yet.
The world’s largest planemaker will buy aerospace parts distributor KLX Inc. for $3.25 billion while also taking on about $1 billion of net debt. The deal is contingent on the separation of KLX’s energy business, which the company plans to spin off to shareholders.
The purchase underscores Muilenburg’s bid to extend Boeing’s reach into the highly profitable business providing maintenance, spare parts and other services over the multi-decade lives of jetliners and military aircraft. The Boeing CEO has set a goal of more than tripling sales at the company’s newly formed services division to $50 billion within a decade.
“We continue to see global services as our biggest market-growth opportunity,” Muilenburg told reporters at the company’s annual meeting, hours before the deal was announced.
KLX fell 10 percent to $70.32 at 10:52 a.m. in New York after dropping as low as $70.15 for the biggest intraday decline in almost two years. Boeing slipped 1.7 percent to $327.91.