US-based Leonardo DRS buys Israeli radar company RADA

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Leonardo’s US electronics company DRS has entered into an all-stock merger with Israel’s RAD Electronic Industries, the two companies said in a joint statement. announcement this week.

Leonardo DRS is set to acquire 100% of RADA’s share capital in exchange for RADA shareholders’ approximately 19.5% stake in the combined company. Leonardo DRS will acquire all of RADA’s tactical radar equipment for approximately $670 million, according to a report by Calcalist.

The merged company will retain Leonardo DRS as its name and is expected to trade on NASDAQ and TASE under the symbol “DRS”.

The transaction is expected to be finalized in the fourth quarter of 2022, when RADA will become a 100% subsidiary of Leonardo DRS. Leonardo DRS is poised to become a market leader in advanced detection and force protection in several rapidly growing segments of the US and international defense markets.

The combined company is expected to generate significant growth from a wide range of new and high-growth markets, further enhancing the future battlefield for the US military and its allies.

Founded in 1970, RADA is a Netanya-based global defense technology company that primarily develops radar solutions and proprietary avionics systems. The company specializes in mini tactical radars that serve attractive and high-growth markets such as active military protection, C-UAS (against unmanned aircraft systems), critical infrastructure protection and surveillance borders.

RADA’s unique advanced tactical radars are complementary to Leonardo DRS and are expected to enhance its position as an air defense, counter-UAS and vehicle protection integrator in the force protection market segment.

The merger with Leonardo DRS is expected to significantly strengthen RADA’s global competitive positioning and elevate its scale, program diversity, cash generation and relevant markets, which in turn will provide opportunities for growth and value creation. important in the future.

“The transaction provides the combined company with the flexibility to add capabilities in Leonardo DRS core markets through targeted acquisitions and strategic investments, as we expect to complement strong organic growth with mergers and acquisitions and distributions of dividends as part of our overall strategy going forward,” said William J. Lynn III, CEO of Leonardo DRS.

“I couldn’t be prouder of the platform we’ve built throughout my nearly 20 years with RADA, culminating in this important strategic transaction with Leonardo DRS,” said Dov Sella, CEO of RADA. “The combination of two technology-focused defense companies with diversified exposure to key U.S. Department of Defense programs and an international presence creates a real win-win for RADA and Leonardo DRS shareholders.”

The transaction, he said, “represents the first time that a major US-based defense company, backed by a global defense leader, has acquired a major Israeli defense technology company. This unique transaction will strengthen the Israeli defense industry and set trends and direction for the future. For RADA in particular, partnering with Leonardo DRS will significantly increase our competitiveness in the emerging and demanding markets we serve, which are dominated by solid and established players. We look forward to working alongside the Leonardo DRS team to continue driving innovation in the advanced sensing and force protection markets, as well as creating value for our shareholders.

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