L-3 Communications [LLL] agreed to acquire Crestview Aerospace Corp. [CAC] for $135 million in cash.

The acquired business is expected to have annual sales of approximately $120 million in 2006, and will be included in the L-3 Aircraft Modernization and Maintenance unit.

The acquisition is expected to close in the third quarter of 2006, subject to customary closing conditions, and to be slightly accretive to L-3 earnings in 2006.

With facilities in Fairhope, Ala., and Crestview, Fla., CAC provides aircraft structures, major airframe assemblies and military aircraft modifications for leading prime contractors and original equipment manufacturers.

Customers include the Department of Defense, Bell Helicopter Textron, [TXT], The Boeing Co. [BA], Northrop Grumman Corp. [NOC] and Lockheed Martin Corp. [LMT].

Additionally, L-3 currently partners with CAC for C-130 aircraft, as well as for H-60 and H-35 helicopters.

“CAC has a great heritage as part of the old Fairchild Industries,” said Frank C. Lanza, L-3 chairman and CEO “The business was bought in 1990, and was subsequently turned around by the Shanklin family and its highly skilled workforce. Since that time, CAC has grown substantially to become an industry leader and preferred supplier to the primes because of its focus on quality, service, customers and cost-effectiveness.”

CAC brings several benefits to L-3, Lanza said.

“CAC offers a number of advantages to L-3 in our efforts to pursue future major structure and airframe modification and upgrade opportunities,” he said. “CAC gives L-3 turnkey manufacturing and modification capabilities that are within 80 miles of seven military bases, and it is geographically situated for business with Special Operations Command and [the] Air Force Special Operations Command.”