Kratos Defense & Security Solutions Inc. will acquire Integral Systems Inc. in a cash-and-stock transaction worth $266 million, according to announcements by the companies.
Kratos Defense & Security Solutions Inc. will acquire Integral Systems Inc. in a cash-and-stock transaction worth $266 million, according to announcements made May 16 by the companies.
Integral Systems stockholders will receive an amount in cash and stock having an aggregate value of approximately $13.00 per share as of the date of the agreement. Specifically, each Integral Systems share will be converted into $5.00 in cash and 0.588 of a share of Kratos common stock.
Integral Systems, of Columbia, Md., is a developer and provider of satellite system command and control software, signal monitoring, telemetry, interference identification and military range processing products and solutions. Its signal processing systems are used by approximately 80 percent of U.S. space missions, and its products support approximately 75 percent of commercial geostationary satellite operators.
Integral Systems will be integrated into Kratos’ Technology, Communications and Cyber business.
According to the Integral Systems announcement, the merger with San Diego-based Kratos is projected to:
- Accelerate the combined corporation’s addressable market, significantly enhancing presence across the Defense Department, intelligence community and public safety sector.
- Create new growth opportunities within markets such as unmanned aerial vehicle command and control, satellite-to-ground situational awareness, Radio Frequency interference mitigation and countermeasure systems.
- Augment market opportunities through an expanded global footprint, distribution channels and customer base.
- Enable higher margin platforms and integrated solutions through combined product offerings and enhanced systems integration capabilities.
“We believe that combined we will have one of the most technologically oriented businesses in a growing and mission critical national security priority area," Phil Carrai, president of Kratos' Technology, Communications and Cyber business, said in the announcement.
Completion of the transaction – which has been unanimously approved by both companies’ boards of directors – is subject to the approval of the stockholders of both Kratos and Integral Systems.
In connection with the acquisition, Kratos has been provided with firm commitments for debt financing in an aggregate principal amount of up to $145 million by Jefferies Group Inc. and Key Capital Corp.
This is Kratos' second major acquisition in a year. Last October Kratos acquired Henry Bros. Electronics Inc. for about $45 million in cash.
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