Kratos sells electronic products division in $265M deal

Kratos Defense & Security Solutions is selling the U.S. and U.K. operations of its electronic products division to Ultra Electronics Holdings in a $265 million cash deal.

The division that Kratos is selling provides electronic systems, subsystems and components for electronic warfare, missile, radar, intelligence, surveillance and reconnaissance programs, the company said in a release.

“The operations that Ultra is acquiring provide industry leading and formidable high technology microwave products that are established on a significant number of the DoD's strategic national security electronic warfare, missile, radar, intelligence, surveillance and reconnaissance programs and platforms,” said Kratos president and CEO Eric DeMarco .

After the deal closes, Kratos is planning a repurchase of between $175 million and $200 million of its 7 percent senior secured notes and will pay down outstanding amounts on the company’s $110 million bank credit facility, the company said.

“Through this process, our strategy of building a technology and products based business that supports strategic National Security programs while generating significant value for our stakeholders has been both verified and demonstrated through the strong interest we received for several Kratos businesses,” DeMarco said.