Story by Dave DeWitte
Photo by Bill Adams
CEDAR RAPIDS – The largest acquisition ever completed by Rockwell Collins – ARINC Inc. – is taking shape with recent announcements that ARINC will become part of a new Rockwell Collins Information Management Services business unit and one major ARINC business unit will be divested.
Rockwell Collins completed the $1.4 billion acquisition of Annapolis, Md.-based ARINC on Dec. 23, about four months after the planned acquisition was announced.
The new business unit, announced Tuesday, will initially have about 2,150 employees, according to Rockwell Collins spokeswoman Pam Tvrdy. It will become the fourth business unit of Rockwell Collins, joining Commercial Systems, Government Systems and International & Service Solutions.
Senior Vice President of Information Management Services Jeff Standerski will lead the new business unit. Mr. Standerski, a 25-year Rockwell Collins veteran, was most recently vice president and general manager of the company’s business unit serving the business and regional jet market.
ARINC, based in Annapolis, Md., is a major international provider of communications and information processing solutions for airports and airlines that was offered for sale by its private equity owner, The Carlyle Group. ARINC also provides solutions used in industries as diverse as railroads and nuclear power security.
Rockwell Collins CEO Kelly Ortberg and other senior leaders met this week with leaders and employees in Annapolis, receiving an “overwhelmingly positive” response, Ms. Tvrdy said. Employees were both receptive to the new leadership and excited about the business opportunities created by combining the organizations, she added.
For Rockwell Collins, securing ARINC was seen as a way to help restore growth to a business that had been socked alternately by the post-9/11 downturn in commercial aircraft demand and recent cutbacks in the United States defense budget. Because many ARINC customers use its service on a recurring subscription basis, it could help make Rockwell Collins revenues’ more predictable and reduce reliance on government markets.
Tuesday’s announcement highlights perhaps the biggest reason for the acquisition, however – opening opportunities for new services that will leverage capabilities of ARINC’s secure and reliable ground-based networks at airports working with Rockwell Collins’ networks and systems aboard aircraft.
“In recent years there’s been a dramatic increase in demand by airlines and business aircraft operators, as well as the broader transportation and security industries, for the types of network and connectivity services ARINC provides,” Mr. Standerski said in a Rockwell Collins press release. “I’m excited about the opportunity to work with this talented and dedicated team to explore the new possibilities that now exist given the combined strengths of our organization.”
The new business unit will include four segments, all of which will be led by executives coming from ARINC. Airline and Network Services will be led by Vice President David Poltorak. Flight Support Services will be led by Vice President Steven Means. Airports and Surface Transportation will be led by Vice President David Morrissey and IMS International will be led by Vice President Randy Pizzi.
The new business unit will include not only ARINC but the Houston-based Flight Information Solutions business segment of Rockwell Collins that provides its Ascend family of services for streamlined flight planning and maintenance activities. ARINC will bring its own flight planning offering, ARINC Direct, into the Information Management Services business. It is a leader in regional trip support, while Ascend is best known for international trip support.
Plans call for the two flight management product lines to be integrated over the next eight to nine months, Ms. Tvrdy said, although customers’ interactions with the services will remain the same in the interim.
Rockwell Collins announced plans on Dec. 23 to divest ARINC’s Aerospace Systems Engineering and Support business, because it did not fit with Rockwell Collins’ long-term strategy. About 300 employees of the division, based in Oklahoma, will continue to work for Rockwell Collins while a buyer is sought, Ms. Tvrdy said. The business had provided about 15 percent of ARINC’s annual revenues, providing systems integration and modifications for military aircraft, along with maintenance and logistics support.
ARINC’s Industry Standards Organization, a much smaller part of the ARINC business, was sold to SAE International at the same time the ARINC acquisition was completed by Rockwell Collins.
ARINC Standards are consensus-based standards that describe avionics, cabin systems, protocols, and interfaces used by more than 10,000 air transport and business aircraft worldwide, according to the company’s web site.
While ARINC will fall under a new Rockwell Collins business unit, Ms. Tvrdy said the ARINC name will still be retained as a brand on very specific products.
Rockwell Collins, with a global workforce of about 19,000, is the largest publicly-traded company in the Creative Corridor.
(Editor’s Note: Corridor Business Journal Linn County Reporter Dave DeWitte has previously been employed as a contractor by Rockwell Collins).