L3Harris Technologies [NYSE:LHX], the aerospace and defense company, is expected to look at further asset sales after the divestiture of its avionics business, an effort which is at an advanced stage, said three sources familiar with the matter.

Two of the sources said L3Harris continues to look at rejiggering its segments and this will likely lead to more divests of businesses that may not fit. These two sources and the third source familiar identified L3Harris’ electronic warfare business as one potential divest candidate as it is not viewed as core to the company. The three sources said strategics are expected to show interest in that asset if it comes up for sale. One of these sources said private equity firms could also be among the possible buyers.

L3Harris’ electronic warfare business is part of the company’s Space & Airborne Systems segment. L3Harris’ other two segments are Integrated Mission Systems and Communication Systems. The company streamlined its business segments from four business segments to three business segments in 2022.

L3Harris’ Space & Airborne Systems business had around USD 6.1bn in 2022 revenue, up 2% from the year prior when it had close to USD 5.97bn in sales. In the 10-K, the company said the decreases in segment operating income and operating income margin in fiscal 2022 compared with fiscal 2021 were primarily due to a USD 67m decrease in net favorable EAC adjustments due to higher input costs and program performance, mainly in Electronic Warfare and Space businesses, and new program ramps, partially offset by a decrease in R&D expenses.

This news service reported in July that Melbourne, Florida-based L3Harris is working with financial advisors Morgan Stanley and Moelis on the divest of a package of avionics assets. It was also reported last month that L3Harris was in the second round of the process.

For this report, two of the sources said the remaining parties showing interest in the asset are primarily strategics. These sources noted Veritas Capital showed interest earlier in the process but they were not aware of whether the private equity firm is still looking.

A Bloomberg report from 1 August said General Electric’s [NYSE:GE] aerospace unit, TransDigm Group [NYSE:TDG] and CVC Capital Partners are among potential suitors for the avionics business. This news service also reported The Jordan Company was showing interest.

The assets being sold, which include commercial avionics and commercial flight training businesses, have USD 100m to USD 150m in EBITDA, it was further reported. L3Harris is aiming to sell the package as a whole, not in parts.

L3Harris has been keen on getting rid of non-core assets, as reported by this news service. In April, on the company’s 1Q23 earnings call, L3Harris CEO Chris Kubasik said, in response to an analyst’s question, that while it won’t disclose what the company decided is non-core, it has a regular process to review the portfolio. Kubasik added the company gets a lot of inbound calls.

L3Harris has a market capitalization of USD 33.12bn.

Morgan Stanley and Moelis declined to comment. L3Harris and Veritas Capital did not respond to requests for comment.