L3 Strengthens Intelligence Collection and Surveillance Capabilities With Cyber Acquisitions
July 11 2018 - 8:30AM
Business Wire
L3 Technologies (NYSE:LLL) announced today that it has entered
into a definitive agreement to acquire Azimuth Security and
Linchpin Labs, two information security businesses that
significantly strengthen L3’s existing C6ISR (Command, Control,
Communications, Computers, Cyber-Defense and Combat Systems, and
Intelligence, Surveillance and Reconnaissance) capabilities and
create synergies to drive future growth in cyber and international
markets.
“These acquisitions sharpen our capabilities, heighten our
responsiveness and advance L3’s prime position as a C6ISR solutions
provider,” said Christopher E. Kubasik, L3’s Chairman, Chief
Executive Officer and President. “We are making targeted
investments in cutting-edge technologies and integrating them with
existing capabilities to support our domestic and international
customers in strategically important business areas.”
Based in Australia, Canada, the United Kingdom and the United
States, Azimuth and Linchpin operate in the strategic fields of
computer network operations and vulnerability research for
intelligence partners and other government, defense and security
agencies around the world.
“These pioneering intelligence solutions – the ‘I’ in ISR – give
our customers an intelligence advantage through next-generation
network security and threat mitigation,” said Jeff Miller, L3’s
Senior Vice President and President of its Sensor Systems business
segment.
The acquired companies will become L3 Trenchant upon completion
of the transaction and will help deliver advanced capabilities
integral to a variety of complex ISR and classified missions.
The combined purchase price for the two businesses was
approximately AUD$270 million (approximately USD$200 million). The
purchase price is subject to an upward adjustment of up to AUD$43
million (approximately USD$32 million), payable in L3 common stock,
based on the combined company’s post-acquisition sales for each of
the 12-month periods ending June 30, 2019 to 2021, which would be
payable in 2019 to 2021.
This transaction is anticipated to be completed during the
second half of 2018, subject to customary closing conditions and
regulatory approvals. For 2019, Trenchant is expected to add
approximately $65 million to net sales after amortization of
acquired deferred revenue and to be slightly earnings per share
accretive after employee retention expenses and business
combination purchase accounting adjustments, including intangible
asset amortization expenses. The purchase price, excluding the
potential contingent consideration (described above), represents a
multiple of approximately 7x Trenchant’s estimated 2019 earnings
before interest, taxes, and depreciation and amortization
(EBITDA).
About Linchpin Labs and Azimuth Security Linchpin
Labs is a custom software development company with headquarters in
Ottawa, Canada, serving corporate and government clients globally.
The business was founded in 2007, with a particular expertise
centered on computer network operations, cross-platform and
low-level systems development, and IT security services.
Azimuth Security is an information security consultancy focused
on in-depth analysis of software systems, including threat
modelling and design, configuration and source code review. Azimuth
is headquartered in Sydney, Australia, and serves enterprise
clients and commercial software vendors.
About L3 Technologies Headquartered in New York
City, L3 Technologies employs approximately 31,000 people worldwide
and is a leading provider of a broad range of communication,
electronic and sensor systems used on military, homeland security
and commercial platforms. L3 is also a prime contractor in
aerospace systems, security and detection systems, and pilot
training. The company reported 2017 sales of $9.6 billion.
To learn more about L3, please visit the company’s website at
www.L3T.com. L3 uses its website as a channel of distribution of
material company information. Financial and other material
information regarding L3 is routinely posted on the company’s
website and is readily accessible.
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