Raytheon buys Applied Signal Technology

Raytheon Co. has signed a definitive agreement to acquire Applied Signal Technology Inc., a processor of communications signals for tactical and strategic intelligence missions, for $38 a share in cash, for an aggregate purchase price of approximately $490 million.

Under the terms of the agreement, which has been approved by the boards of directors of both companies, Raytheon will commence a tender offer to purchase all outstanding shares of Applied Signal Technology common stock, a Raytheon statement released today said.

Raytheon said the transaction is not expected to have a material effect on its earnings.

Applied Signal’s tactical signals and communications intelligence systems, data fusion and information operations/information assurance products, combined with Raytheon’s sensor technology, program management, mission support and system integration capabilities, will provide highly specialized solutions to an expanded range of intelligence and defense customers in the United States and around the world, Raytheon said.

Nearly 90 percent of Applied Signal's sales are to classified customers.

The public company's portfolio includes secure broadband network communications; cyber intelligence systems, software and analytics to address sophisticated cyberspace threats; electronic warfare solutions; and other advanced capabilities that enable customers to detect, evaluate and respond to potential threats.

“Applied Signal brings world-class technologies and talent that complement Raytheon's strong intelligence, surveillance and reconnaissance solutions,” William Swanson, Raytheon chairman and CEO, said in the announcement.

After successful completion of the transaction, which is expected in the first quarter of 2011, Applied Signal will be integrated into Raytheon's Space and Airborne Systems business.

Applied Signal is based in Sunnyvale, Calif.

Raytheon Co., of Waltham, Mass., ranks No. 4 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors.