Leonardo DRS buys Israeli radar co RADA at 34% premium

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Netanya-dependent Israeli defense business RADA Electronic Industries Ltd. (TASE: RADA Nasdaq: RADA), which provides tactical radar techniques, is merging with US enterprise Leonardo DRS Inc. The inventory-primarily based transaction will outcome in RADA’s present shareholders keeping 19.5% of the merged company. The offer is anticipated to close in the fourth quarter of this year. RADA will turn into a wholly-owned subsidiary of Leonardo DRS, which will be mentioned on Nasdaq and on the Tel Aviv Inventory Exchange less than the image DRS. The terms of the offer characterize a 34% top quality around RADA’s closing share value yesterday, valuing the corporation at $775 million.

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The mixed company is predicted to make EBITDA as a percentage of earnings in the minimal double-digits in 2023. The merged company had $2.7 billion revenue and $305 million altered EBITDA in 2021. At the stop of the initially quarter of 2022, the merged firm had debt of somewhere around $197 million.

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RADA is a veteran organization that for most of its existence dealt in avionics. In excess of a 10 years back, it entered a new area, that of superior software program-described military services tactical radars. The radars are mounted on military cars and run on the move. They consequently deliver ground forces with active security, this sort of as from mortars and assault drones. The organization is also nonetheless lively in its regular subject of avionics.

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“RADA and Leonardo DRS are sturdy and complementary technology organizations, and their close historical partnership through collaboration on various plans, has resulted in a deep cultural match,” the companies’ announcement reported.

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The announcement also mentioned that “Leonardo DRS’s mother or father firm and sole shareholder, Leonardo SpA, is a foremost world-wide Aerospace and Defense organization. Leonardo SpA’s current market posture will give accessibility to a reshaped European defense industry as properly as defense markets all-around the planet, whilst also setting up a household market in Israel.”

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RADA CEO Dov Sella reported, “I could not be prouder of the platform we have designed through my nearly 20 years with RADA, culminating in this essential strategic transaction with Leonardo DRS. The mixture of two primary know-how-concentrated defense providers with diversified exposure to crucial US Section of Protection plans and an worldwide presence generates a genuine acquire-earn for RADA and Leonardo DRS shareholders.

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“The transaction signifies the to start with time a key US-centered defense business backed by a global defense key has acquired a considerable Israeli protection engineering business. This unique transaction will bolster the Israeli defense market and set tendencies and route for the foreseeable future.”

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“The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the require for contemporary, capable pressure defense units. Not only is this accelerating US purchases of these units, but it is transferring European nations around the world, which are considerably driving in this region, to obtain additional critical force security belongings. The combination of RADA and Leonardo DRS will open up worldwide market alternatives, specifically in small-range air protection, counter-UAS, counter rockets, artillery and mortars and car protection units,” claimed William J. Lynn III, CEO of Leonardo DRS.

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Evercore is serving as special financial advisor to RADA and J.P. Morgan Securities LLC is serving as exceptional monetary advisor to Leonardo DRS. DLA Piper LLP (US) and S. Friedman & Co. are serving as legal advisors to RADA and Sullivan & Cromwell LLP and Herzog Fox & Neeman are serving as authorized advisors to Leonardo DRS.

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Printed by Globes, Israel business enterprise information – en.globes.co.il – on June 21, 2022.

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© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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