B/E Aerospace, Inc. (NASDAQ:BEAV), today announced that it has signed a definitive agreement with Honeywell International Inc. to acquire the assets of Honeywell’s Consumables Solutions distribution business (HCS). As part of the transaction B/E Aerospace will enter into a 30-year contract to become Honeywell’s exclusive licensee with respect to the sale to the global aerospace industry of Honeywell proprietary fasteners, seals, gaskets and electrical components associated with such products as Honeywell’s Engines, APU’s, avionics, and wheels and brakes. B/E Aerospace will also become the exclusive supplier of such consumable products, as well as standard fasteners and consumables to support Honeywell’s internal manufacturing needs.

“The combination of HCS and B/E Aerospace will create a leading global distributor and value added supply chain manager of aerospace hardware and other consumable products from locations in all key geographic markets worldwide. The combined Company will serve as a distributor for every major aerospace fastener manufacturer in the world. In addition, the significant product line expansion and operating synergies created by the combination will enhance our ability to serve our customers and create significant value for our shareholders,” said Amin J. Khoury, Chairman and Chief Executive Officer of B/E Aerospace.

Revenues and pro forma EBITDA, exclusive of synergies, for the latest twelve months ended March 31, 2008 (LTM) for the HCS business, including the license and supply agreements, were approximately $553 million and $83 million, respectively. Tax-deductible goodwill arising on completion of the transaction will provide B/E Aerospace with an estimated net present value of approximately $143 million resulting in an effective price of $907 million or approximately 10.9x LTM EBITDA, excluding synergies, and approximately 5.4x LTM EBITDA, including synergies. The transaction is expected to yield synergies of at least $84 million per year by 2011, thereby creating substantial additional shareholder value. The annual synergies that are expected to be realized over the three-year period 2009 to 2011 are as follows: approximately $10 million to $30 million or approximately $0.05 to $0.20 per share in 2009, approximately $30 million to $60 million or approximately $0.20 to $0.40 per share in 2010 and at least $84 million or approximately $0.55 per share in 2011.

The purchase consideration of $1.05 billion consists of at least $800 million in cash plus an additional amount of $250 million which will be paid in B/E Aerospace common stock or cash, at the Company’s election, although in no event will less than 6 million shares be issued if the value of the stock component is less than $250 million. The share component of the $250 million portion of the purchase price will be valued depending upon the value of the shares, determined as the volume-weighted average share price based on the 10 consecutive trading days ending on, and including, the date that is two trading days prior to the closing date. Honeywell and B/E Aerospace have entered into a stockholders agreement which includes a holding period for two years with respect to 50 percent of its B/E Aerospace shares and for one year with respect to all of its B/E Aerospace shares and which includes a stand-still provision.