Italian defense firm expands U.S. presence with DRS buy
- By Nick Wakeman
- May 13, 2008
DRS Technologies Inc., a rising star in the government information technology services world, is being acquired by Finmeccancica SpA, an Italian defense company looking to expand in the U.S. market.
If the $5.2 billion cash deal is approved by regulators, DRS will operate as a wholly owned subsidiary under its current management and with a board of directors separate from Finmeccanica's board. The structure is required for the company to comply with U.S. national-security laws.
The transaction allows Finmeccanica to consolidate its international role as a supplier of integrated systems for defense and security. The deal also allows DRS to pursue new business opportunities in the United States and abroad, the companies said in a statement.
Through contract wins and its own acquisitions, DRS has climbed steadily in the government services market. It made its debut on the Washington Technology Top 100 in 2005 at No. 75. In the 2008 rankings
released Monday, it holds the No. 22
DRS is expected to continue to grow after the acquisition closes by the end of this year.
"This investment in DRS ? with an increased emphasis on research and development ? will mean the combined company will be able to compete for and win additional contracts around the world, accelerating growth and expanding opportunities at our facilities in the U.S.," said Mark Newman, chairman of the board, president and chief executive officer at DRS.
Finmeccanica's expertise lies in helicopters, defense electronics and security, aeronautics, space, defense systems, energy, and transportation. DRS has strengths in command, control, communications, computers and intelligence; reconnaissance, surveillance and target acquisition; sustainment systems; and technical services.
Finmeccanica has several U.S. subsidiaries, most doing helicopter and aircraft work.
The company is offering DRS stockholders $81 a share, 32 percent more than average for the previous 30 days of trading.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.