BAE Systems to Buy GPS, Radio Businesses for $2.2 Billion
By Matteo Castia
BAE Systems PLC (BAESY) said Monday that it has agreed to buy
Collins Aerospace's Military Global Positioning System and
Raytheon's Airborne Tactical Radios businesses for a total price of
The defense-and-security company said that it will pay $1.93
billion for Collins Aerospace' GPS business and $275 million for
Raytheon Co.'s (RTN) radio business. Both acquisitions are subject
to the closure of the ongoing merger between Raytheon and Collins
Aerospace's parent company United Technologies Corp. (UTX).
BAE said the GPS business is expected to generate a revenue of
$359 million and adjusted earnings before interest, taxes,
depreciation and amortization--which strips out exceptional and
other one-off items--of $127 million this year. It added that it
anticipates the business to be "immediately earnings and cash flow
accretive," and that it will generate returns on investment from
its third full year of trading.
BAE also said that the radio business is expected to generate
$125 million for 2019.
BAE's Chief Executive Charles Woodburn highlighted the strategic
nature of these acquisitions, which are "focused on areas of
highest priority defense spending" in the U.S.
Write to Matteo Castia at firstname.lastname@example.org
(END) Dow Jones Newswires
January 20, 2020 02:49 ET (07:49 GMT)
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