BAE Systems, Inc. announced January 20 that it has reached definitive agreements for the proposed acquisitions of Collins Aerospace’s military Global Positioning System (GPS) business and Raytheon’s Airborne Tactical Radios (ATR) business.
These two high-performing businesses are being sold in connection with obtaining the required antitrust clearances for the previously announced pending merger between Raytheon and United Technologies Corporation (UTC).
The proposed acquisitions are structured as asset transactions with associated tax benefits, and they remain subject to customary closing adjustments. The asset purchase agreement for the Collins military GPS business calls for cash of $1.925 billion, with an expected tax benefit of approximately $365 million. For Raytheon’s ATR business, the purchase agreement calls for cash of $275 million, with an expected tax benefit of approximately $50 million.
These proposed acquisitions are subject to the successful closure of the Raytheon-UTC transaction, as well as the satisfaction of other customary closing conditions, including receipt of the required U.S. regulatory approvals. Upon closure, both business lines would be integrated into the company’s Electronic Systems sector.
“These are strong businesses with talented employees who share our focus on quality and technology innovation,” said Tom Arseneault, President and COO of BAE Systems, Inc. “We are confident of a smooth transition that will accelerate our future together and look forward to welcoming these new employees to the BAE Systems team once the transactions are approved.”
Based in Cedar Rapids, Iowa, Collins’ military GPS business is a longstanding provider of mission critical military GPS receiver systems. It designs and produces advanced, hardened and secure GPS products to include M-Code, anti-jamming, and anti-spoofing technologies. The business has an installed base of over 1.5 million devices on approximately 280 platform types around the world, including ground, airborne, and weapon systems.
Raytheon’s ATR business is a provider of airborne tactical radio solutions. Based in Fort Wayne, Indiana, and Largo, Florida, the ATR business designs, manufactures, and supplies a wide array of mission-critical communication systems to the U.S. Department of Defense, allied governments, and large defense aircraft manufacturers.
