M&A Roundup

BAE to buy UDI

BAE Systems North America Inc. has entered into a definitive merger agreement to acquire United Defense Industries Inc. of Arlington, Va., for $4.2 billion, company officials said.

The purchase will put BAE in a better position to work with the Army's Future Combat Systems program and to repair and upgrade combat vehicles in the United States and abroad, said officials of the subsidiary of BAE Systems plc, Farnborough, England.

Under the proposed deal, BAE would buy UDI for $75 per share in cash, or about $3.97 billion, and assume $218 million in debt. The deal must get regulatory clearances, and shareholders from both companies must approve it. The deal is expected to close midyear.

DRS streamlines its focus

DRS Technologies Inc. is divesting its broadcast and weather system divisions as part of a strategy to concentrate on its core defense technology business.

In a deal worth $31.5 million, DRS is reselling to Veritas Capital Fund of New York two units that it picked up in 2003 when it acquired Integrated Defense Technologies Inc. from Veritas.

Jefferies Quarterdeck was financial adviser to DRS on the sale of DRS Broadcast Technology, which develops and manufactures radio frequency broadcast transmitters, systems and power amplifiers. Houlihan Lokey Howard & Zukin advised DRS on the sale of DRS Weather Systems, which develops and manufactures Doppler weather surveillance radar systems, receivers, components and software.

Microsoft gets a Groove

Microsoft Corp. announced plans to acquire collaboration software vendor Groove Networks Inc. of Beverly, Mass. Financial terms of the deal were not disclosed.

Groove Workspace version 2.5 was one of several commercial applications that met the criteria for the Defense Collaboration Tool Suite, a Defense Information Systems Agency initiative to establish a suite of interoperable software for military use.

Microsoft plans to integrate Groove's software, which Groove renamed Groove Workspace for the 3.0 version, into its own family of collaboration products, such as Microsoft Office Live Meeting 2005 and Microsoft Office SharePoint Portal Server.

MTC picks up German division

MTC Technologies Inc. of Dayton, Ohio, has acquired the German operations of Eagle Support Services, a move that bolsters MTC's work with the Army in Europe.

MTC made the deal to support a $35 million contract awarded in late 2004 to reconstitute equipment from the Army's 1st Armored Division, which is deployed in Iraq, the company said. Under the contract, MTC helps the Army refurbish and repair equipment that is returning from Iraq.

Eagle-D GmbH will be integrated into MTC's newly established branch office in Speyer, Germany. Eagle Support Services is headquartered in Huntsville, Ala.

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