CAE finds buyer for healthcare business
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By
Ross Wilkers
This divestiture agreement takes place two years after CAE acquired a military training division from L3Harris Technologies.
CAE has found a buyer for its health care business as the provider of modeling-and-simulation technologies and training services looks to focus on doing more of that for its defense and aviation customer sets.
Private investment firm Madison Industries has agreed to pay $227.2 million to acquire CAE Healthcare in a transaction both parties expect to close before the end of CAE's 2024 fiscal year that ends March 31.
"This decision to streamline our portfolio better positions CAE to efficiently allocate capital and resources to secure the many attractive growth opportunities on the horizon in our much larger, core simulation and training markets," CAE chief executive Marc Parent said in a release Tuesday.
Montreal-headquartered CAE will use proceeds from the divestiture to pay down debt and invest in technology development for its training and simulation portfolio, which grew significantly through CAE's acquisition of a military training business from L3Harris Technologies in 2021 for approximately $1.05 billion.
For CAE's 2023 fiscal year, health care revenue of $254.3 million represented approximately 4.6% of the company's overall sales. Contracts with U.S. federal government agencies made up for 22% of total revenue, according to CAE's annual report.
The CAE Healthcare business focuses on developing solutions for simulation-based medical education to support clinical competency and patient safety functions of care providers.