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BAE ACQUIRES MTC TECHNOLOGIES

24 Dec 07. BAE Systems today announced it has entered into a definitive agreement to acquire MTC Technologies, Inc., a Dayton, Ohio-based company providing technical and professional services, and equipment integration and modernization for the U.S. military and intelligence agencies.

MTC Technologies’ shareholders will receive $24 in cash per share of common stock, without interest, in the transaction, representing a total consideration for MTC Technologies’ fully diluted share capital of approximately US $367m. Including the assumption of net debt of US $81m, the transaction is valued at approximately US $450m.

The acquisition of MTC Technologies is consistent with BAE Systems’ strategy to become the premier global defense and aerospace company by growing its business in the company’s six home markets, including the United States, and by growing the company’s worldwide services businesses.

MTC Technologies is an excellent addition to BAE Systems,” said Walt Havenstein, president and Chief Executive Officer of BAE Systems, Inc. “This acquisition helps us become an even more effective prime contractor and provider of technical solutions and services, which means we will have a greater capability to meet our customers’ most demanding needs, specifically in the areas of readiness and sustainment.”

MTC Technologies, which currently employs approximately 2,900 people, will
become part of BAE Systems’ Customer Solutions operating group, headquartered in
Arlington, Virginia, as part of the company’s Technology Solutions & Services
(TSS) line of business.

The combination of MTC Technologies with BAE Systems is an outstanding fit with very complementary offerings, and will position the organization to bring proven capabilities to a broader spectrum of customers. BAE Systems has long been recognized as a leading provider of solutions and services across a product’s life-cycle for the U.S. Navy. MTC Technologies similar expertise in supporting
U.S. Air Force and U.S. Army programs will create an organization poised to deliver critical solutions to its customers throughout the U.S. Armed Forces and the U.S. intelligence community.

The proposed acquisition is conditional upon receiving certain required regulatory clearances and the approval of MTC Technologies shareholders’, among other things, and is expected to close in the first half of 2008.

MTC Technologies delivers innovative solutions involving systems engineering, information technology, intelligence, and program management services primarily to the Department of Defense. Cited by Forbes as 16th of the “25 Fastest
Growing Technology Companies-2006,” by Washington Technology as 34th in revenue growth among the “Top 100” of IT Federal Prime Contractors, and ranked 14th by
Aviation Week & Space Technology among the “Top Performing Companies-2007,” MTC Technologies employs approximately 2,900 people in more than 40 locations. The company was founded in 1984 and is headquartered in Dayton, Ohio.

BAE Systems Surveillance and Attack business

On December 19th BAE Systems has today signed a definitive agreement to sell its Surveillance and Attack business in Lansdale, Pennsylvania, to Sensor and Antenna Systems, Lansdale, Inc., a subsidiary of Cobham Defence Electronic Systems Corporation. The approximately 400 BAE Systems employees in Lansdale provide broadband high-power transmitter and radio frequency front-end systems for military aircraft. The equipment is used for communications and radar jamming, as well as radar warning. The $240m deal was done on a on a debt and cash free basis payable on completion. The goodwill arising on completion is an allowable tax expense with an estimated net present value of US$45m, resulting in an effective price of US$195m. The acquisition is expected to complete in the first quarter of 2008, subject to regulatory approval.

On completion, the unit, which is based in Lansdale, Pennsylvania, USA, will be rena

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