BAE Systems jettisons products group

In a move to concentrate the full weight of its resources on systems integration, BAE Systems plans to sell its inertial products business to J.F. Lehman and Co. for $140 million cash. The deal is expected to close 60 days following regulatory approval.

The move is consistent with BAE Systems' strategy to expand as a developer and integrator of systems and de-emphasize its role as a components provider, the Rockville, Md.-based company said.

BAE Systems' Inertial Products business supplies military and commercial customers with inertial sensors and measurement units for the control, navigation and guidance of aircraft, unmanned aerial vehicles, and a host of other weapons platforms and munitions.

The unit has about 810 employees at sites in Connecticut, New Jersey, Ohio and the United Kingdom. The sale also includes BAE Systems' share of Silicon Sensing Systems, a joint venture between BAE Systems and Sumitomo Precision products that is based in the United Kingdom and Japan.

J.F. Lehman and Co. of New York is a private investment firm that focuses on acquiring middle market companies in the defense, aerospace and maritime industries and the technologies that originate from them and are designed for them.

BAE Systems has about 45,000 employees and had annual sales of about $10 billion in 2006. The company ranks No. 11 on Washington Technology's 2006 Top 100 list of the largest federal IT contractors.