31 Jan 06. DRS Technologies, Inc. (NYSE: DRS) announced today that it has completed its acquisition of Engineered Support Systems, Inc. (NASDAQ: EASI). In the transaction, a wholly-owned subsidiary of DRS was merged with Engineered Support Systems (ESSI), forming DRS’s third operating segment – the Sustainment Systems & Services Group. The acquisition is expected to add $0.20 accretion in diluted earnings per share to DRS in its first full fiscal year of operation. In the merger, each share of ESSI common stock was converted into the right to receive a combination of $30.10 in cash and 0.2628 of a share of DRS common stock, valued at approximately $12.90, based on the average closing price of DRS’s common stock for the ten trading-day period ended January 27, 2006. The cash portion of the acquisition aggregated approximately $1.3 billion at closing. Total consideration for the acquisition, including approximately $74.0 million of ESSI’s net debt at closing, was approximately $1.97 billion before transaction fees and expenses. “We are pleased to welcome the employees of Engineered Support Systems to DRS and look forward to working with them to offer our customers the expanded product and services capabilities of the combined company,” said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. “The addition of Engineered Support Systems is an important milestone in DRS’s growth, contributing a significant base of systems, products and services focused on military force sustainment, technical and logistics support, integrated military electronics and field support equipment. The combination of the two companies firmly establishes DRS Technologies as a leading total solutions provider of defense products and services with $2.9 billion in annual revenues. Our expanded capabilities position the company as a major supplier in armed forces modernization, personnel mobility and operations and maintenance (O&M) support, while providing new opportunities for growth in intelligence and homeland security markets. We look forward to integrating this new operation with DRS and to building stockholder value by fully leveraging the strengths, synergies and supplemental capabilities this combination offers.” DRS financed the acquisition by utilizing existing excess cash on hand, bank borrowings and $900 million of new debt securities, including $350 million aggregate principal amount of 6.625 percent senior notes due 2016, $250 million aggregate principal amount of 7.625 percent senior subordinated notes due 2018 and $300 million aggregate principal amount of 2.0 percent convertible senior notes due 2026. Bear, Stearns & Co. Inc. served as financial advisor to DRS on the transaction. Merrill Lynch & Co., Inc. also served as financial advisor to DRS for the purpose of rendering a fairness opinion. Lehman Brothers Inc. served as financial advisor to ESSI on the transaction.
30 Jan 06. DRS Technologies, Inc. (NYSE: DRS) announced today that it has priced a private placement of $300 million aggregate principal amount of convertible senior notes due 2026. DRS also has granted to the initial purchasers of these notes a 13-day option to purchase up to an additional $45 million principal amount of the notes. The sale of the convertible notes is expected to close on January 31, 2006, subject to customary closing conditions. DRS intends to use the net proceeds from the offering, together with other available funds, to finance its previously announced acquisition of Engineered Support Systems, Inc. (NASDAQ: EASI), to repay certain of Engineered Support Systems’ outstanding indebtedness, and to pay related fees and expenses.
31 Jan 06. Ericsson, the world’s largest manufacturer of mobile phone networks, said it expected only “moderate growth” this year as it reported strong fourth-quarter earnings. Sales in the three months to the end of December rose 16 per cent to SKr45.7bn ($6bn), against SKr39.4bn for the same peri