Date: Dec 20, 2010 Author: Rodney H. Brown Source: bizjournals (
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Waltham-based defense titan Raytheon Co. plans to spend $490 million in cash to purchase California-based signal and communications technology company Applied Signal Technology Inc., which will be rolled into Raytheon's Space and Airborne Systems (SAS) business.
The terms of the agreement, which have been approved by the boards of directors of both companies, calls for Raytheon (NYSE: RTN) to pay $38 per share for all outstanding shares of common stock of Applied Signal (Nasdaq: APSG). The sale is expected to close in the first quarter of 2011, assuming the usual conditions are met.
Buying Applied Signal gives Raytheon access to its tactical signals and communications intelligence systems, data fusion and information operations/information assurance products, which will be combined with Raytheon's sensor technology, program management, mission support and system integration capabilities. According to a statement from William H. Swanson, chairman and CEO of Raytheon, "This combination of strengths, along with our complementary cultures of innovation, will provide capabilities to address our customers' current and future challenges while creating value for our shareholders."
If anything, Applied Signal's customer base is deeper in the defense and security departments of the U.S. government than Raytheon's -- nearly 90 percent of Applied Signal's sales are to classified customers.
In November, Raytheon landed a $240 million contract to produce components of the Aegis weapons system for naval destroyers. Raytheon Integrated Defense Systems, the company's Tewksbury-based arm, will provide the production, engineering and support services for the components, which will be used by four ship sets in the Arleigh Burke class of destroyers.
Raytheon reported 2009 sales of $25 billion, and employs 75,000 people worldwide.
