BY Richard Summerfield
L3Harris Technologies Inc. has agreed to acquire rocket engine manufacturer Aerojet Rocketdyne Holdings Inc. in a deal valued at around $4.7bn.
Under the terms of the deal, which is expected to close in 2023, subject to required regulatory approvals and clearances and other customary closing conditions, L3Harris will pay $58 per share, in an all-cash transaction valued at $4.7bn, inclusive of net debt. L3Harris will use existing cash and issue new debt to fund the deal
The deal marks L3Harris’ second acquisition announcement of 2022 after previously agreeing to acquire Viasat’s tactical data links unit, which provides data and voice communications systems for military vehicles, aeroplanes and ships, for $1.96bn.
Lockheed Martin, the world’s largest defence contractor by revenue, tried to buy the Rocketdyne for $4.4bn before abandoning the bid after federal regulators sued in January to block it. The Federal Trade Commission (FTC) noted that Lockheed would use its ownership of Aerojet to damage other defence companies and would ultimately control multiple defence programmes critical to national security.
“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher E. Kubasik, chief executive and chair of L3Harris. “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”
“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen P. Drake, chief executive and president of Aerojet Rocketdyne. “Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution. As part of L3Harris, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration. This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”
Aerojet Rocketdyne currently generates around $2.3bn in annual revenue. The company’s employees operate out of advanced manufacturing facilities across the US. L3Harris has more than $17bn in annual revenue and customers in more than 100 countries.
News: Defense firm L3Harris to buy Aerojet for $4.7 bln with eye on missile demand