M&A

L3 closes info security deals, quietly makes unmanned acquisition

L3 Technologies closed a pair of acquisitions of information security businesses on Friday as the company continues the ongoing effort to recast itself as a more formidable, high-end defense technology business.

For the combined initial price of around $200 million, Azimuth Security and Linchpin Labs now operate under the name of L3 Trenchant within the parent company’s intelligence, surveillance and reconnaissance systems segment.

First announced in July, the deals aim to strengthen L3’s offerings in “C6ISR” -- command, control, communications, computers, cyber defense, combat systems, intelligence, surveillance and reconnaissance.

New York City-based L3 also quietly made an acquisition in June of unmanned aircraft systems company Latitude Engineering for $15 million in cash. The company disclosed that deal in its second quarter 10-Q regulatory filing to the Securities and Exchange Commission. Latitude Engineering designs, manufactures, integrates, services, operates and supports hybrid quadrotor unmanned aerial systems.

L3 has altogether made four acquisitions this year so far as CEO Chris Kubasik continues to steer the company in the direction of becoming a “nontraditional sixth prime.” The first deal was closed in July for space technology company Applied Defense Solutions.

Those deals were preceded by the divestiture of Vertex and two other aerospace businesses as part of L3’s effort to gain greater focus on high-end technology areas called out in the 2017 National Security Strategy.

L3 more recently consolidated its aerospace and sensor systems segments into the new ISR division, which Azimuth and Linchpin will operate under.

The price of Azimuth and Linchpin could increase by $32 million in stock based on their post-acquisition sales over the next three years. L3 expects both businesses to contribute $65 million in net sales next year.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

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