On Monday after close of trading, Lockheed Martin (NYSE: LMT ) announced that its wholly owned Canadian subsidiary has entered into an agreement to purchase "certain assets" of Aveos Fleet Performance's maintenance, repair, and overhaul (MRO) business.
Lockheed's defense business is under pressure from looming Pentagon budget cuts. Like other defense contractors, it's been branching out into other areas of business lately in order to diversify its revenue streams in advance of cuts. In a statement, Lockheed said the purchase "is consistent with our strategy of acquiring capabilities that enhance our ability to expand into attractive adjacent market opportunities." The company plans to integrate the MRO acquisition into its Aeronautics division and rename it "Kelly Aviation Center Montreal."
Lockheed noted that the new MRO assets will enable it to perform "a complete range of services" on CF34 and CFM56 engines that are commonly used on Embraer (NYSE: ERJ ) and Bombardier regional commercial jets, as well as on Airbus A320 jets.
Lockheed did not disclose financial terms of the transaction. Lockheed does $47.3 billion in annual business, and called the new MRO business "not material to Lockheed Martin." That said, Aveos Fleet Performance does have a sizable business in its own right. According to S&P Capital IQ, the company does more than $770 million in annual sales.
Shares of Lockheed closed up 0.3% ahead of the news Monday, at $94.22.