L-3 Communications Acquires Wescam Inc., a Leading Provider of Wireless Visual Information Systems; Adds Electro-optical to L-3's ISR&C Products and Subsystems.
NEW YORK--(BUSINESS WIRE)--Sept. 18, 2002
L-3 Communications (NYSE:LLL) today announced that it has signed a definitive agreement with Wescam Inc. (TSX:WSC) pursuant to which, L-3, through a wholly owned subsidiary, will offer to purchase all of the outstanding common shares of Wescam for Cdn$9.50 per share in cash.
The total value of the transaction is approximately US$118 million. The transaction is being unanimously recommended by the Wescam Board to its shareholders. The offer is expected to be mailed to shareholders in early October, and is expected to close by the end of 2002, pending standard closing conditions, including 66 2/3% of the outstanding shares (on a fully diluted basis) being deposited to the offer, and customary regulatory approvals. The acquisition is expected to add approximately US$100 million of sales and between US$0.02 and $0.03 of earnings per share to L-3's 2003 results of operations.
Based in Burlington, Ontario, Wescam designs and manufactures systems for defense applications that capture images from mobile platforms and transmits them in real time to tactical command centers for interpretation and for commercial broadcast applications to production facilities.
Wescam's Government Systems Division supplies its precision stabilized electro-optic surveillance systems to the Intelligence, Surveillance and Reconnaissance & Communications (ISR&C) market, including maritime patrol aircraft, unmanned aerial vehicles, targeting, surveillance, force protection and CASR (combat, search and rescue). Wescam's products include high magnification lowlight, daylight and forward looking infrared sensors; laser range finders, illuminators and designators; and digital and wireless communication systems that combine imagery with wireless datalinks for network communications.
Customers include the U.S. Department of Defense, the U.S. Department of Transportation, the U.S. Navy, Army, Air Force, Marines and Coast Guard and international military organizations including the Canadian Navy and the German Border Guard. Wescam also serves prime contractors and original equipment manufacturers including Lockheed Martin, Northrop Grumman, Thales and General Dynamics. Additionally, the company provides products to law enforcement agencies and police departments in the United States and internationally.
The Commercial Systems Division also provides an array of precision stabilized cameras and products for action events in newsgathering, cinematography, film production and sports broadcasting and has long-standing relationships with customers, including CBS, ESPN, MGM Pictures, Warner Brothers, Fox Sports, Paramount Pictures and the Olympic host broadcast network.
"One of L-3's key strategic acquisition goals as outlined was to add a strong EO company that has a recognized technical edge over the competition, and Wescam does that for us," said Frank C. Lanza, chairman and chief executive officer of L-3 Communications. "The company is a well managed business with an excellent track record and a solid focus on cost-competitiveness."
"Wescam adds a needed key product base of EO/IR products to our ISR&C capabilities," continued Mr. Lanza. "It is essential and complementary to our Integrated Systems, Communication Systems-East and Communication Systems-West divisions, and we see significant new opportunities for a number of platforms. In addition, as the U.S. military and various international governments concentrate on bolstering their ISR&C capabilities to deal with terrorist threats, there are numerous opportunities to build Wescam's business base."
"Homeland defense is another key market for Wescam's products," said Mr. Lanza, "and they complement L-3's existing offerings, including crisis management, perimeter security and intrusion detection systems. There has been considerable demand for EO products both domestically and internationally and Wescam is well positioned to take advantage of this growth."
Mr. Lanza also noted that Wescam has a broad array of products and has delivered over 1,000 systems for 60 different platforms with many of the world's leading military forces. In its commercial segment, the company is considered the market leader for aerial cinematography, providing systems that require the most demanding and technically challenging visual information systems to transmit stable, jitter-free video from extended distances.
Lehman Brothers Inc. served as the financial advisor to L-3 Communications on the acquisition.
Headquartered in New York City, L-3 Communications is a leading merchant supplier of Intelligence, Surveillance and Reconnaissance (ISR) products, secure communications systems and products, avionics and ocean products, training products, microwave components and telemetry, instrumentation, space and wireless products. Its customers include the Department of Defense, selected US government intelligence agencies, aerospace prime contractors and commercial telecommunications and wireless customers.
To learn more about L-3 Communications, please visit the company's web site at www.L-3Com.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters set forth in this news release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including the risks and uncertainties discussed in the company's Safe Harbor Compliance Statement for Forward-looking Statements included in the company's recent filings, including Forms 10-K and 10-Q, with the Securities and Exchange Commission.
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|Date:||Sep 18, 2002|
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