General Dynamics to acquire Veridian

General Dynamics Corp. announced this morning that it plans to acquire Veridian Corp. for $1.5 billion.

The two companies signed a definitive agreement for Falls Church, Va.-based General Dynamics to pay $35 a share for each outstanding Veridian share. General Dynamics will also assume $270 million in Veridian debt.

Veridian of Arlington, Va., founded several years ago and has made a series of acquisitions of its own and went public last year. This morning its shares soared 27 percent, opening at $34.80, up from $27.35 at Friday's close. General Dynamics shares opened at $68.25, virtually unchanged. The deal is expected to close by Sept. 30.

Veridian is expected to have $1.2 billion in revenue in 2003 and has a contract backlog of $2.6 billion. General Dynamics said it expects Veridian's 2004 revenue to be $1.4 billion.

"This superb company significantly broadens our Information Systems and Technology group's customer base within the defense and intelligence arenas, and gives us a strong and well-established presence throughout our nation's federal, state and local emergency response communities," said Nicholas D. Chabraja, General Dynamics chairman and chief executive officer.

Veridian's capabilities include network security and enterprise protection; intelligence, surveillance and reconnaissance; knowledge discovery and decision support; information systems development and integration; chemical, biological and nuclear detection; network and enterprise management; and large-scale systems engineering expertise. More than 75 percent of Veridian's employees hold national security clearances.

In 2002, General Dynamics reported that its Information Systems and Technology Group had $3.7 billion in revenue. Overall, General Dynamics reported $13.8 billion.

(Updated 10:01 a.m.)