RADA Electronic Industries Ltd., an Israeli company that develops tactical radar technologies, has been acquired by Leonardo DRS Inc., a mid-tier defense technology provider in a deal worth an estimated $670 million. According to the agreement the two will enter into an all-stock merger and become a combined public company.
Rada has been publicly traded on the NASDAQ since 1985.
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Pro forma for the merger, Leonardo SpA and RADA shareholders will own approximately 80.5% and 19.5%, respectively, of the new combined company on a diluted basis, which will maintain the name Leonardo DRS and is anticipated to trade on NASDAQ and TASE under the symbol “DRS.”
The 19.5% ownership in the combined company provided to RADA shareholders was designed to provide a premium in excess of 20% over the current value of their RADA stock.
RADA is a global defense technology company focused on proprietary radar solutions and legacy avionics systems. The Company offers mini-tactical radars, serving attractive, high-growth markets which include active military protection (SHORAD, C-RAM), counter-UAS missions, critical infrastructure protection and border surveillance.
Leonardo DRS is a mid-tier provider of defense products and technologies for the U.S. military and its allies with core capabilities in advanced sensing, force protection, network computing and electric power and propulsion.
Leonardo DRS’s parent company and sole shareholder, Leonardo SpA, is a global Aerospace and Defense company. Leonardo SpA’s market position will provide access to a reshaped European defense market as well as defense markets around the world, while also establishing a home market in Israel.
The two companies said that RADA’s advanced tactical radars will improve Leonardo DRS’s position as an air defense, counter-UAS and vehicle protection integrator, accelerating its transformation into a provider of integrated sensor systems and leader in advanced sensing and force protection markets.
Dov Sella, RADA’s CEO, commented, “I could not be prouder of the platform we have built throughout my nearly 20 years with RADA, culminating in this important strategic transaction with Leonardo DRS. The combination of two leading technology-focused defense companies with diversified exposure to key U.S. Department of Defense programs and an international presence creates a true win-win for RADA and Leonardo DRS shareholders. The transaction represents the first time a major U.S.-based defense company backed by a global defense prime has acquired a significant Israeli defense technology company. This unique transaction will strengthen the Israeli defense industry and set trends and direction for the future. For RADA specifically, joining forces with Leonardo DRS will significantly increase our competitiveness in the emerging and demanding markets we are addressing, which are dominated by strong and established players. We look forward to working alongside the Leonardo DRS team to continue driving innovation in the advanced sensing and force protection markets, and value creation for our shareholders.”
