What will change with Israel’s yes to the merger between Leonardo and Drs
The shareholders' meeting of the Israeli Rada Electronics approved the merger with Leonardo Drs, the US subsidiary of the Italian defense and aerospace group. The closing of the operation is expected in November. The merged company will be listed on Nasdaq
Green light for the Leonardo Drs-Rada Electronics merger.
The shareholders of the Israeli company Rada approved the merger with Leonardo Drs, the US subsidiary of the defense and aerospace group led by Alessandro Profumo.
In June Leonardo announced the merger between Leonardo Drs and Rada Electronic Industries , a leading company in tactical radars including the protection of critical infrastructures, active military protection and applications against drones.
As a result of the merger, a note reads, Leonardo Drs will acquire 100% of the share capital of Rada in exchange for the assignment to the current shareholders of Rada of approximately 19.5% in Leonardo Drs. The former Finmeccanica group, through its US subsidiary Leonardo Holding, will continue to own 80.5% of the combined company.
Upon completion of the transaction, scheduled for next month, Leonardo Drs will be listed on both Nasdaq and Tase (Tel Aviv stock exchange) under the symbol "DRS".
So double listing in sight for Leonardo Drs. 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 income between 730 and 800 million for the parent company which would have kept between 75% and 78% of the American group in the defense sector.
Meanwhile, Leonardo has rationalized the business of the American subsidiary. In August, satellite telecommunications company SES Government Solutions completed the $ 450 million acquisition of Leonardo DRS's satellite communications subsidiary Global Enterprise Solutions. Last April Leonardo Drs signed a binding agreement for the sale of the shareholding in the Advanced acoustic concepts (Aac) joint venture to Tdsi, a subsidiary of the French company Thales.
All the details.
THE PROJECTS OF DRS WITH RADA
The landing at Nasdaq is ready for Leonardo Drs with Rada.
As Rada communicates on the website , the combined company has $ 2.7 billion in revenues and Ebitda of $ 305 million in 2021. The green light from Rada shareholders follows the examination of the SEC, the US federal body in charge of stock exchange supervision.
WHAT IS THE ISRAELIAN RADA
Founded in 1970, the Rada group is based in Israel in Netanya. It is a leading provider of advanced software-defined military tactical radars. The company is a leader in tactical radars, serving exciting and fast-growing markets, including critical infrastructure protection, border surveillance, active military protection, and drone applications. Rada is listed on Nasdaq and on the Tel Aviv stock exchange.
THE EFFECTS OF THE MERGER
The expected goal is that "Leonardo Drs and Rada together can generate significant growth fueled by their range of competitive products that meet the core needs of their customers" underlines a note from the group.
“The combination of Rada's tactical radars and Leonardo Drs' strengths as a leading mid-tier defense provider is expected to make the combined company a leader in the rapidly growing Force Protection market, increase our market potential, expand our international opportunities and, finally, it will generate value for shareholders ”, declared William J. Lynn III, CEO of Leonardo Drs.
THE PERFUME STRATEGY
Thesis also supported by the words of Leonardo's CEO Alessandro Profumo: “There is an excellent level of complementarity between our US subsidiary Leonardo Drs and Rada: strategic, commercial and financial”.
“As promised, we have focused the Leonardo Drs portfolio and are now strengthening Drs with Rada in the strategic core businesses, with further growth potential, margin expansion and opportunities in the Leonardo Group. We have agreed on an all-stock merger, also taking the opportunity to list Drs in the current context of market volatility, thus realizing what was expected last year ”added Profumo on the occasion of the announcement of the transaction .
THE LAST MOVES
In fact, in August the Italian defense and aerospace group announced that the US subsidiary Leonardo Drs has completed the sale of the Global Enterprise Solutions (Ges) business to Ses for an amount equal to 450 million dollars, before tax. The transaction was finalized after all required regulatory approvals had been obtained, a note indicated.
The transaction was announced on March 22 with the aim of optimizing its portfolio and continuing to focus on the core business. In fact, in addition to the sale of Ges, Drs also sold the investment in the Advanced Acoustic Concepts (Aac) joint venture to Tdsi, controlled by Thales.
THE STRATEGY OF LEONARDO DRS
According to the number one of Leonardo Drs, the merger with Rada is on track to close next month.
He said this on the sidelines of the American Army Association's annual meeting in Washington in mid-October. The move will consolidate Leonardo Drs as a "strong mid-tier company," CEO Bill Lynn said in an interview with Defense One .
“The combined company will be more agile than the larger companies because it has fewer layers of bureaucracy,” Lynn added. "This is a huge advantage at a time when the Pentagon is emphasizing speed in its arms purchases as it seeks to thwart advances in Chinese military technology," Defense One reports.
RECENT SUCCESSES RECEIVED BY THE US SUBSIDIARY
In fact, in October Leonardo Drs announced the award of a contract for the production of new generation thermal sights for small arms of the American army. The contract, worth 579 million dollars signed with the US Army Contracting command, awarded already in April, has a duration of five years.
In detail, Leonardo DRS Electro-Optical Infrared Systems (EOIS) will produce advanced Family of Weapons Sights – Individual (FWS-I) systems for its US Army client: a self-contained clip-on weapon sight that plugs into wireless mode to helmet-mounted vision systems.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/cosa-cambiera-con-il-si-di-israele-alla-fusione-tra-leonardo-e-drs/ on Tue, 25 Oct 2022 10:51:00 +0000.