B/E Aerospace, Inc. (NASDAQ: BEAV) today reported Q3 ’14 results and in its press release, discussed its pending spin-off of KLX:
The Company currently intends to capitalize KLX through the issuance of approximately $1.2 billion of senior unsecured notes, and to use approximately $750 million of the net proceeds to pay a dividend to B/E Aerospace, leaving KLX with an expected approximately $430 million in cash for general corporate purposes, approximately $110 million of which is expected to be used to settle deferred payments associated with 2014 acquisitions. In addition, the Company expects KLX will establish a secured revolving credit facility for general corporate purposes.
The Company expects to redeem all of its outstanding debt in order to effect the separation of the two businesses. The Company’s new long-term debt is presently expected to be comprised of secured pre-payable term debt. The proceeds of the new long-term debt, together with the expected dividend from KLX will be utilized to prepay all of the Company’s current debt obligations and to pay all costs and expenses associated with the KLX spin-off. The Company also expects to establish a secured revolving line of credit for general corporate purposes. The Company currently estimates that it will incur, during the second half of 2014, debt redemption costs of approximately $235 million, including the write-off of unamortized debt issue costs, approximately $43 million in legal, accounting, and advisory costs, and approximately $67 million related to international tax initiatives. The Company also expects to incur business repositioning and separation costs of approximately $94 million, including fourth quarter 2014 KLX business repositioning charges as described below.
KLX expects to record a business repositioning charge during the fourth quarter of 2014 of approximately $25 million related to a number of planned facility consolidations, rationalization of headcount, employee transfers and other related costs and expenses. In addition, during 2015 KLX expects to incur approximately $20 million of branding, recruiting, relocation, business repositioning, and other related expenses associated with post spin-off activities.
Source: Press Release
