Leonardo, what will Drs do with Rada on the Nasdaq
The merger of Leonardo's American subsidiary Drs and the Israeli Rada, listed on the Nasdaq and Tel Aviv, is effective today. Facts, numbers and insights
From today the shares of Leonardo Drs begin trading on the Nasdaq and tomorrow on the Tel Aviv Stock Exchange.
Leonardo has in fact communicated the completion of the merger between the US subsidiary Leonardo Drs and the Israeli company Rada Electronic Industries, with automatic listing of Leonardo Drs. Last June, the Italian aerospace and defense group announced the merger of the two companies.
The transaction offers the opportunity to list Leonardo Drs in the current context of highly volatile markets, in line with what has been
“We have finalized the merger process between Leonardo Drs and Rada, an important strategic move by Leonardo in a rapidly growing segment of today's and tomorrow's defense market, represented by Force Protection. There is an excellent level of complementarity between our US subsidiary Leonardo Drs, Rada and the rest of the Leonardo Group which will generate growth, margin expansion and further opportunities for the Group” commented Alessandro Profumo, CEO of Leonardo.
All the details.
THE MERGER OF LEONARDO DRS AND RADA
As previously announced, Leonardo will continue to maintain the 80.5% stake in Leonardo Drs, through the US subsidiary Leonardo US Holding, while the remaining 19.5% will be assigned to the current shareholders of Rada.
THE LISTING OF THE US SUBSIDIARY
Furthermore, the operation will make it possible to draw the benefits deriving from the listing of Leonardo Drs, specifies the note from the Piazza Monte Grappa group. "With this transaction we are also taking the opportunity to list DRS in the current context of market volatility, thus realizing what was envisaged last year" added Leonardo Profumo's number one.
Last year Leonardo had in fact postponed an initial public offering (IPO), citing "adverse market conditions". The IPO project envisaged the placement of 22-25% of DRS for a total proceeds of between 730 and 800 million for the parent company which would maintain between 75% and 78% of the American group in the defense sector.
THE CONSULTANTS
JP Morgan Securities assisted Leonardo's American subsidiary for the financial aspects, while Sullivan & Cromwell LLP and Herzog Fox & Neeman for the legal aspects.
THE TARGET
The merger is perfectly aligned with Leonardo's strategic, commercial and financial objectives, allowing the Group to achieve a unique positioning in the surface radar segment thanks to the synergy deriving from its product portfolio together with that of Rada, Hensoldt and Gem.
We recall that before finalizing the merger with Rada, Leonardo rationalized the business of the American subsidiary. In August, satellite telecommunications company SES Government Solutions completed the $450 million acquisition of Leonardo DRS' satellite communications subsidiary Global Enterprise Solutions. Last April Leonardo Drs signed a binding agreement for the sale of the stake in the Advanced Acoustic Concepts (Aac) joint venture to Tdsi, a subsidiary of the French company Thales.
THE STRATEGY OF LEONARDO DRS WITH RADA
“We look forward to bringing Leonardo DRS' mid-tier presence to market enhanced by RADA's tactical radar solutions,” said William J. Lynn III, President and CEO of Leonardo DRS. “Leonardo DRS' broad exposure to rapidly growing segments of the defense market and market leading positions in advanced sensing, force protection, network computing, electric generation and propulsion make us a unique defense supplier with strong growth opportunities, ability to expand margins, and strong balance sheet and financial position.”
Furthermore, the transaction will guarantee Leonardo a stable domestic presence in the Israeli industrial context, supporting the development of Leonardo's international market, and at the same time allowing Rada to access opportunities in European and export markets and programs, leveraging on the global presence by Leonardo.
READY FOR NEW ACQUISITIONS
Finally, at the local level Leonardo Drs creates a more independent operating entity, one with “our balance sheet, we have our governance, we have our board, we have our own shares – which gives us much more strategic flexibility,” Lynn stressed. “We have had great organic growth over the last few years. This gives us the opportunity to also look at acquisitions, as part of the increase in value but it gives us a way to self-finance the acquisitions” explained the CEO of Leonardo Drs in a recent interview with Breaking Defense .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/leonardo-cosa-fara-drs-con-rada-al-nasdaq/ on Tue, 29 Nov 2022 09:55:37 +0000.