DRS finishes ESSI acquisition
By
Nick Wakeman
DRS Technologies Inc. closed today its $1.97 billion cash and stock deal for Engineered Support Systems Inc.
DRS Technologies Inc. closed today its $1.97 billion cash and stock deal for Engineered Support Systems Inc.
With the deal, DRS expands its capabilities as a supplier in armed forces modernization, personnel mobility and operations and maintenance support. It also picks up new customers in intelligence and homeland security markets.
DRS is paying about $1.3 billion in cash and about $600 million in stock for St. Louis-base ESSI. It also is picking up $74 million in ESSI debt.
ESSI was merged with another part of DRS to form a third operating unit for the company called the Sustainment Systems and Services Group.
"The addition of Engineered Support Systems is an important milestone in DRS' growth, contributing a significant base of systems, products and services focused on military force sustainment, technical and logistics support, integrated military electronics and field support equipment, said Mark Newman, chairman, president and CEO of DRS Technologies of Parsippany, N.J.
ESSI had 2005 revenue of $1 billion and the acquisition brings DRS' annual revenue to $2.9 billion.
Bear, Stearns & Co. Inc. and Merrill Lynch & Co. Inc. served as financial advisors to DRS. Lehman Brothers Inc. advised ESSI.
ESSI ranks No. 43 on Washington Technology's 2005 Top 100 list of the top federal IT contractors. DRS is ranked No. 75. At noon today, its stock was trading at $49.89 on the New York Stock Exchange, up 20 cents from the day before.