DRS Technologies Completes Acquisition of Engineered Support Systems.PARSIPPANY, N.J. -- DRS Technologies DRS Technologies, Inc. (commonly known as DRS; formerly known as Diagnostic/Retrieval Systems, Inc.) is a supplier of defense electronic products and systems to the United States Air Force, Army, Coast Guard, Marine Corps, Navy, aerospace and defense prime , Inc. (NYSE NYSE See: New York Stock Exchange : DRS DRS Drives (street suffix) DRS Dispute Resolution Service DRS Doctorandus DRS Department of Rehabilitative Services DRS Direct Registration System (securities) DRS Department of Rehabilitation Services ) announced today that it has completed its acquisition of Engineered Support Systems, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : EASI EASI Equal Access to Software and Information EASI Environmental Alliance for Senior Involvement EASI Energy Automation Systems, Inc. EASI Easy Access for Students and Institutions (student financial assistance) EASI Engineered Air Systems Inc. ). In the transaction, a wholly-owned subsidiary of DRS was merged with Engineered Support Systems (ESSI ESSI Ecole Supérieure en Sciences Informatiques (French) ESSI Eon Silicon Solution Inc ESSI Engineered Support Systems Inc. ESSI Education Statistics Services Institute ESSI European Systems and Software Initiative ), forming DRS's third operating segment - the Sustainment Systems & Services Group. The acquisition is expected to add $0.20 accretion in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of to DRS in its first full fiscal year of operation. In the merger, each share of ESSI common stock was converted into the right to receive a combination of $30.10 in cash and 0.2628 of a share of DRS common stock, valued at approximately $12.90, based on the average closing price of DRS's common stock for the ten trading-day period ended January 27, 2006. The cash portion of the acquisition aggregated approximately $1.3 billion at closing. Total consideration for the acquisition, including approximately $74.0 million of ESSI's net debt at closing, was approximately $1.97 billion before transaction fees and expenses. "We are pleased to welcome the employees of Engineered Support Systems to DRS and look forward to working with them to offer our customers the expanded product and services capabilities of the combined company," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. "The addition of Engineered Support Systems is an important milestone in DRS's growth, contributing a significant base of systems, products and services focused on military force sustainment, technical and logistics support, integrated military electronics and field support equipment. The combination of the two companies firmly establishes DRS Technologies as a leading total solutions provider of defense products and services with $2.9 billion in annual revenues. Our expanded capabilities position the company as a major supplier in armed forces modernization, personnel mobility and operations and maintenance (O&M) support, while providing new opportunities for growth in intelligence and homeland security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States markets. We look forward to integrating this new operation with DRS and to building stockholder value by fully leveraging the strengths, synergies and supplemental capabilities this combination offers." DRS financed the acquisition by utilizing existing excess cash on hand, bank borrowings and $900 million of new debt securities, including $350 million aggregate principal amount of 6.625 percent senior notes due 2016, $250 million aggregate principal amount of 7.625 percent senior subordinated notes due 2018 and $300 million aggregate principal amount of 2.0 percent convertible senior notes due 2026. Bear, Stearns & Co. Inc. served as financial advisor to DRS on the transaction. Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. & Co., Inc. also served as financial advisor to DRS for the purpose of rendering a fairness opinion Fairness Opinion A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition. Notes: A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition. . Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. Inc. served as financial advisor to ESSI on the transaction. DRS Technologies, headquartered in Parsippany, New Jersey, is a leading supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide. The company employs approximately 10,000 people. For more information about DRS Technologies, please visit its web site at www.drs.com. SAFE HARBOR Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and OF 1995: This press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on management's beliefs and assumptions, current expectations, estimates and projections. Such statements, including statements relating to DRS Technologies' and Engineered Support Systems' expectations for future financial performance, are not considered historical facts and are considered forward-looking statements under the federal securities laws. These statements may contain words such as "may," "will," "intend," "plan," "project," "expect," "anticipate," "could," "should," "would," "believe," "estimate," "contemplate," "possible" or similar expressions. These statements are not guarantees of the companies' future performance and are subject to risks, uncertainties and other important factors that could cause actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements and include, without limitation, demand and competition for such companies' products and other risks or uncertainties detailed in such companies' Securities and Exchange Commission filings. Given these uncertainties, you should not rely on forward-looking statements. Such forward-looking statements speak only as of the date on which they were made, and the companies undertake no obligations to update any forward-looking statements, whether as a result of new information, future events or otherwise. |
|
Printer friendly
Cite/link
Email
Feedback
Reader Opinion