Creates a New Leading Player in Defense Electronics with Balanced Global Presence
(Rome, Italy and Parsippany, NJ., May 13, 2008) -- Finmeccanica, S.p.A. (Milan: FNC), a world leader in the supply of electronics equipment and defense and security systems and services, and DRS Technologies, Inc. (NYSE: DRS), a leading supplier of integrated defense electronics products, services and support, today announced that they have signed a definitive merger agreement under which Finmeccanica will acquire 100% of DRS stock for US$81 per share in cash.
The transaction allows Finmeccanica to consolidate its international role as a key supplier of integrated systems for defense and security, entering the U.S. market as a key player. It further allows DRS to seek new business opportunities in the U.S. and abroad.
The transaction, valued at approximately US$5.2 billion (Euro 3.4 billion), inclusive of approximately $1.2 billion in net debt, following the conversion of DRS' convertible notes, represents a premium of 27 percent to DRS' closing share price on May 7, 2008; it is also a 32 percent premium over DRS' thirty-day average stock price traded on the NYSE.
The Boards of Directors of Finmeccanica and DRS have each approved the terms of the agreement.
DRS will operate as a wholly-owned subsidiary, maintaining its current management and headquarters. As is customary in this type of transaction, DRS and Finmeccanica will comply with all national security requirements and will propose to the Defense Security Service (DSS) that the company operate under a Special Security Agreement (SSA), with its own board of directors comprised predominantly of U.S. citizens holding security clearances and a government security committee. With increased business opportunities that will arise following the transaction, it is expected that DRS will expand its overall employment base.
"Today's transaction is a perfect fit; the complementary technologies and platforms will establish a new competitive player in defense and security markets in the U.S. and around the world," said Pier Francesco Guarguaglini, chairman and chief executive officer of Finmeccanica. "The merger furthers Finmeccanica's tradition of investing in the U.S. and supporting the American warfighter with superior technology and value."
"DRS' dramatic growth over the past five years and the premium provided through this acquisition will provide attractive returns for our stockholders", said Mark S. Newman, chairman of the board, president and chief executive officer of DRS. "This investment in DRS - with an increased emphasis on research and development - will mean the combined company will be able to compete for and win additional contracts around the world, accelerating growth and expanding opportunities at our facilities in the U.S.".