DRS acquires IDS for $373 million

DRS Technologies today signed a definitive agreement to merge Integrated Defense Technologies into a wholly owned subsidiary of DRS for approximately $373 million.

DRS Technologies, Inc (DRS) today signed a definitive agreement to merge Integrated Defense Technologies (IDS) into a wholly owned subsidiary of DRS for approximately $373 million. As a result of the merger, DRS will acquire all of the outstanding stock of IDT for $17.50 per share in cash and DRS common stock.

‘IDT and DRS are two of the largest defence electronics suppliers in the world. The combination will firmly establish DRS Technologies as the leading mid-tier defence technology company with an approximate run rate of $1.2 billion in annual revenues,’ said Mark S. Newman, DRS Technologies’ chairman, president and chief executive officer.

DRS Technologies said the acquisition would help it accomplish several objectives, such as significantly expanding DRS’s intelligence agency business. IDT will contribute a significant new base of US Air Force programs, including the recently awarded P5 Combat Training System contract with a ten-year cumulative value estimated at $367 million.

The transaction is expected to close by the end of this year and is subject to regulatory approvals and other closing conditions, including approval by a majority of IDT’s stockholders at a special meeting. The acquisition is expected to be immediately accretive to earnings.

DRS expects to provide the cash to acquire IDT by utilising existing available excess cash, additional bank borrowing and through the issuance of debt securities.