Thales enters into exclusive negotiations to sell its aeronautical electrical systems business to Safran

Thales

Thales’ aeronautical electrical system business (ELS) provides a full suite of critical electrical power systems embedded in prestigious civil and military platforms, while providing key support services to ELS’ global installed base. ELS is a key player in the global electrical power conversion market and holds solid positions in electrical power generation and electric motors, particularly in the defense and helicopter markets.

The transaction perimeter includes three sites in the Paris region, France, as well as the support, maintenance and production activities for aeronautical electrical equipment in Florida, United States and Singapore. ELS employs nearly 600 people globally and generated €124 million revenue in 2021 with blue-chip customers like Airbus, Boeing or Dassault Aviation.

The Deal

Leveraging on its set of innovative electrical power systems and scarce research and development (R&D) capabilities, ELS is well positioned to benefit from the megatrend towards the More Electrical Aircraft (MEA). Following a competitive sale process led by Lincoln International, Thales has agreed to enter into exclusive negotiations to sell its aeronautical electrical system business to Safran.

This proposed transaction is part of the Thales Group’s strategy to refocus on its core businesses in aerospace, defense, security and digital identity. Through the ELS acquisition, Safran aims to decisively pursue its strategy as an equipment manufacturer positioned across the whole electrical chain. ELS’ electrical power conversion activities would make a significant contribution to Safran’s portfolio, which would expand further in the area of electrical power generation.

Leveraging its global aerospace and defense (A&D) experience and solid carve-out track record, Lincoln provided advisory and industry expertise to deliver a successful outcome, fending off the challenging commercial aerospace market environment triggered by the COVID-19 crisis, while meeting Thales’ strategic objectives.

Our Perspective

Guillaume Suizdak, Managing Director in Lincoln’s Paris office, commented, “We see a massive A&D industry shift towards the MEA at play, triggering heavy investments across the A&D industry to tap this attractive future growth potential. In this promising market environment, Safran provides a key long-term support to the ELS franchise’s future development.”

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