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09 Jun 03. General Dynamics (NYSE: GD) and Veridian Corporation (NYSE: VNX) have entered into a definitive agreement for General Dynamics to acquire Veridian; General Dynamics will offer $35 in cash for each outstanding Veridian share. With the assumption of Veridian’s $270m of debt, the cost of the transaction would be approximately $1.5bn.

The proposed acquisition, which would be immediately accretive to General Dynamics’ earnings and cash flow, has been approved by the boards of directors of both companies. Subject to an affirmative vote by Veridian shareholders and normal regulatory approvals, the transaction is expected to close by the end of the third quarter of 2003.

Veridian, headquartered in Arlington, Virginia, has more than 7,300 employees in 38 states. The company anticipates 2003 sales of approximately $1.2bn, and has a current business backlog of $2.6bn. General Dynamics estimates Veridian revenues of $1.4bn in 2004.

“This superb company significantly broadens our Information Systems and Technology group’s customer base within the defense and intelligence arenas, and gives us a strong and well- established presence throughout our nation’s federal, state and local emergency response communities,” said Nicholas D. Chabraja, General Dynamics chairman and CEO. “Veridian has grown dramatically in the past 12 months, and we believe it will reach its full potential as part of General Dynamics. It has talented, innovative employees and a fine reputation as a leading provider of mission critical information-based systems, integrated solutions and services.”

Veridian’s capabilities include network security and enterprise protection; intelligence, surveillance and reconnaissance; knowledge discovery and decision support; information systems development and integration; chemical, biological and nuclear detection; network and enterprise management; and large-scale systems engineering expertise. More than 75 percent of Veridian’s employees hold national security clearances.

David H. Langstaff, president and CEO of Veridian, said, “Veridian is known for its outstanding customer service, overall excellence, and the commitment and high standards our employees bring to their work every day. We have established a reputation for integrity and responsibility as we support the mission-critical needs of our national security customers. The acquisition by General Dynamics not only provides significant value for our shareholders, but it enables Veridian to become an even more significant force in its markets. We will be able to invest more aggressively in many of the innovative technologies and capabilities for which we are known, provide a stronger future for our employees as well as broader offerings to our customers, and continue to make a difference in areas that matter for our country.”

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