Posted on 05/13/2008 9:52:06 AM PDT by ATOMIC_PUNK
Italy's Finmeccanica to buy DRS Technologies for $5.2BBusiness Courier of Cincinnati DRS Technologies Inc., which has several Cincinnati-area operations, is being bought by Finmeccanica SpA, an Italian aerospace and defense supplier, for $5.2 billion.
Finmeccanica said the deal, expected to close in the fourth quarter this year, allows the company to enter the U.S. market and enables DRS to better compete in the global military and security market.
DRS (NYSE: DRS) will operate as a wholly owned subsidiary, maintaining its current management and headquarters. The company will lead Finmeccanica's defense electronics efforts in the United States and it is expected that DRS will be adding employees due to the anticipated increase in business.
Finmeccanica is buying DRS for $81 per share, which is subject to approval by DRS stockholders and other customary regulatory approvals and closing conditions.
Parsippany, N.J.-based DRS Technologies supplies integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide.
Locally, DRS owns Keco Industries in Florence, which manufactures military ground equipment; Engineered Environments, a maker or air conditioners, chillers and heat exchangers; and Mobilized Systems Inc., which makes trailers, shelters and environmental control systems; both in Clermont County.
The $5.2 billion price tag includes approximately $1.2 billion in net debt. The deal represents a premium of 27 percent to DRS' closing share price on May 7, and a 32 percent premium over DRS' 30-day average stock price.
Finmeccanica said it will fund the acquisition with a syndicated loan facility to be taken out by a combination of equity issuance, long-term debt issuance, and divestitures of its assets. The company has U.S. subsidiaries in Pennsylvania, New York, Texas, California, New Jersey, Kansas, Virginia, North Carolina and South Carolina.
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