MELBOURNE, Fla. — L3Harris Technologies has signed an agreement to acquire Aerojet Rocketdyne in a $4.7 billion all-cash transaction, the companies announced.
L3Harris, the nation’s sixth-largest contractor, said it is paying $58 per share in the deal. The two companies have facilities in Huntsville.
The acquisition of Aerojet Rocketdyne will provide enhanced business operations, continuous innovation, and ensure continued delivery of essential capabilities for the Department of Defense, the company said.
“We’ve heard the DoD leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher Kubasik, L3Harris CEO and chair. “With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset.”
Aerojet Rocketdyne is a provider of propulsion systems, including hypersonics, including solid rocket motor boosters, scramjets, warheads and missile defense technologies. Its customers include the DoD, NASA, and partners and allies worldwide.
“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen Drake, CEO and president of Aerojet Rocketdyne. “Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution.”
The deal comes less than a year after Aerojet Rocketdyne failed in its attempt to purchase Lockheed Martin for $4.4 billion. Antitrust regulators sued to block the deal saying it would create a near-monopoly because Lockheed Martin was a customer of Aerojet Rocketdyne.
Aerojet Rocketdyne’s solid fuel rocket motors and other propulsion systems would help L3Harris expand its space defense systems and precision munitions businesses, the companies said.
“As part of L3Harris, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration,” Drake said. “This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”
Aerojet Rocketdyne generates nearly $2.3 billion in annual revenue.
The cash acquisition will be funded with existing cash and the issuance of new debt. The deal is expected to close in 2023, subject to required regulatory approvals and clearances and other customary closing conditions.
Don’t miss out! Subscribe to our email newsletter to have all our smart stories delivered to your inbox.
