By Lisa Kerner
Charlotte, N.C., May 13 - Finmeccanica, SpA will acquire 100% of DRS Technologies, Inc. stock for $81 per share in cash, providing Finmeccanica with entry into the U.S. security and defense market.
The transaction is valued at $5.2 billion including $1.2 billion in net debt, according to a Finmeccanica news release.
Finmeccanica's offer price is a 32% premium over DRS' 30-day average stock price.
Both companies' boards of directors have approved the deal, which is expected to close by the fourth quarter of 2008, the release said.
A $90 million termination fee is included in the merger agreement, it was reported in an 8-K filing with the Securities and Exchange Commission.
DRS will operate as a wholly owned subsidiary, maintaining its current management and headquarters location, Finmeccanica said.
Finmeccanica added that it will fund the acquisition with a syndicated loan facility comprised of equity issuance, long-term debt issuance and divestiture of assets, as well as an initial public offering of AnsaldoEnergia.
"DRS' dramatic growth over the past five years and the premium provided through this acquisition will provide attractive returns for our stockholders," DRS chairman, president and chief executive officer Mark S. Newman stated in the release.
"This investment in DRS - with an increased emphasis on research and development - will mean the combined company will be able to compete for and win additional contracts around the world, accelerating growth and expanding opportunities at our facilities in the U.S."
Goldman Sachs International, IntesaSanPaolo SpA, Mediobanca-Banca di Credito Finanziario SpA and Unicredit Group are bookrunners and mandated lead arrangers of the syndicated loan facility.
Lehman Brothers Holdings Inc. is advising Finmeccanica, while Goldman Sachs International and Mediobanca provided a fairness opinion to the company.
DRS is being advised by Bear Stearns & Co. Inc. and Merrill Lynch & Co., both of which also rendered fairness opinions to the DRS board of directors.
Based in Rome, Finmeccanica designs and manufactures helicopters, civil and military aircraft, aero structures, satellites, space infrastructure, missiles and defense electronics and security.
DRS, based in Parsippany, N.J., supplies integrated products, services and support to military forces, government agencies and prime contractors.
| Acquirer: | Finmeccanica, SpA
|
| Target: | DRS Technologies, Inc.
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| Announcement date: | May 12
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| Transaction total: | $5.2 billion
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| Price per share: | $81.00
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| Termination fee: | $90 million
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| Expected closing: | Fourth quarter of 2008
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| Stock price of target: | NYSE: DRS: $77.19 on May 12
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