L-3 Communications [LLL] yesterday said it has agreed to sell its Germany-based Marine Systems International (MSI) business, which is mainly focused on the commercial ship industry, to Finland’s Wartsila Corp.

for $355.9 million in cash.

Wartsila said MSI is expected to generate about $500 million in sales this year with an operating margin of about 6.5 percent. The commercial ship unit has more than 1,700 employees and provides automation, navigation and electrical systems, dynamic positioning technology, and sonar and underwater communications technology for the marine, naval and offshore markets.

The deal is expected to close in the second quarter of 2015 subject to regulatory approval.

In July L-3 Chairman, President and CEO Michael Strianese said the company fired four employees related to the withholding of information about accounting issues within the Aerospace segment. Photo: L-3
L-3 Chairman, President and CEO Michael Strianese. Photo: L-3

L-3 said the sale is part of its ongoing portfolio shaping and bringing value to its core businesses.

Michael Strianese, L-3’s chairman, president and CEO, said  in a statement that the “sale will open up new opportunities for L-3 to further enhance our operations and focus on delivering innovative solutions in our core markets.”

Wartsila, which provides power solutions for the marine and energy markets, said the acquisition will give it a “breadth of capabilities” in the electrical and automation business and is in line with its “growth strategy to become the leading provider of innovative products and integrated solutions in the marine and oil and gas industries.”

Wartsila expects MSI to be accretive to its earnings in 2015.

MSI is part of L-3’s Electronic Systems segment. L-3 said the deal includes an estimated $74.9 million reduction for MSI employees’ pension-related liabilities that will be assumed by Wartsila.