YOU ARE HERE: LAT HomeCollections


Boeing Talking With Bidders for Information Unit

Aerospace: Southland firms may be included. The sale would be part of company's effort to shed unprofitable businesses.

April 08, 1999| From Bloomberg News

Boeing Co., the world's biggest aerospace company, said Wednesday that it is in talks with unnamed bidders, which could include several Southern California firms, to sell its information-services division as it tries to bolster profit from commercial aircraft.

Boeing expects to announce the purchaser by July. The unit, which employs about 1,200 and has sales of $300 million yearly, could fetch $150 million, analysts said. The Vienna, Va.-based unit provides data-processing and other services primarily to the U.S. government.

The sale would be part of a broader effort at Seattle-based Boeing to sell or close unprofitable businesses. The company said in February that businesses valued at $1.3 billion might be shut or sold unless it can turn them around.

Boeing isn't willing to spend more money to take on larger rivals in the information-services industry such as Computer Sciences Corp., analysts have said.

Officials at Litton Industries Inc. and Honeywell Inc. have said they're interested in building their information-services divisions.

Litton spokesman Brandon Belote said the information services industry is an important one to the Woodland Hills-based company. Its existing business produced operating profit of $40 million on revenue of $793 million for the six months ended Jan. 31.

"That area is of great strategic importance to us and we have invested a great deal of money into it," Belote said. He declined to comment on whether Litton was interested in the Boeing deal.

Several other companies could be interested, including El Segundo-based Computer Sciences, DynCorp Inc., TRW Inc. and General Dynamics Corp., analysts have said. Lockheed Martin Corp. and Northrop Grumman Corp. of Los Angeles also have large information-services units of their own and could want the Boeing unit.

Representatives for TRW, General Dynamics, Northrop and CSC declined to comment. DynCorp is aggressively pursuing acquisitions, but does not comment on rumors or speculation, a spokeswoman said.

Boeing's information-services division manages computer networks, installs databases and offers other support at sites such as NASA's Kennedy Space Center and the Naval Air Warfare Center in Point Mugu.

Boeing shares rose 50 cents to close at $34.88 on the New York Stock Exchange.

Los Angeles Times Articles