July 3, 2022

Ztrdam

Good Business

Leonardo DRS buys Israeli radar co RADA at 34% premium

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Netanya-centered Israeli protection business RADA Electronic Industries Ltd. (TASE: RADA Nasdaq: RADA), which creates tactical radar methods, is merging with US enterprise Leonardo DRS Inc. The inventory-centered transaction will end result in RADA’s current shareholders holding 19.5% of the merged firm. The deal is envisioned to shut in the fourth quarter of this yr. RADA will develop into a wholly-owned subsidiary of Leonardo DRS, which will be listed on Nasdaq and on the Tel Aviv Inventory Exchange under the image DRS. The terms of the deal signify a 34% quality around RADA’s closing share cost yesterday, valuing the corporation at $775 million.

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The combined organization is predicted to create EBITDA as a percentage of revenue in the small double-digits in 2023. The blended enterprise experienced $2.7 billion revenue and $305 million altered EBITDA in 2021. At the conclude of the very first quarter of 2022, the merged organization had debt of about $197 million.

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RADA is a veteran enterprise that for most of its existence dealt in avionics. Over a decade ago, it entered a new subject, that of innovative software program-outlined military tactical radars. The radars are mounted on army cars and function on the move. They consequently provide floor forces with lively protection, these kinds of as in opposition to mortars and assault drones. The corporation is also continue to energetic in its conventional field of avionics.

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“RADA and Leonardo DRS are robust and complementary know-how organizations, and their near historical marriage by means of collaboration on various courses, has resulted in a deep cultural fit,” the companies’ announcement explained.

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The announcement also stated that “Leonardo DRS’s guardian company and sole shareholder, Leonardo SpA, is a main world-wide Aerospace and Defense enterprise. Leonardo SpA’s sector place will give access to a reshaped European defense current market as properly as defense marketplaces all-around the planet, whilst also setting up a residence market in Israel.”

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RADA CEO Dov Sella stated, “I could not be prouder of the system we have created all through my virtually 20 many years with RADA, culminating in this critical strategic transaction with Leonardo DRS. The combination of two major technologies-focused protection providers with diversified publicity to key US Department of Protection applications and an global presence generates a real gain-earn for RADA and Leonardo DRS shareholders.

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“The transaction signifies the very first time a important US-centered protection enterprise backed by a worldwide protection key has acquired a significant Israeli protection technologies corporation. This exceptional transaction will improve the Israeli defense marketplace and set tendencies and direction for the future.”

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“The conflict in Ukraine has underscored the vulnerability of forces to drone assaults and has highlighted the need for modern, able drive defense techniques. Not only is this accelerating US buys of these methods, but it is moving European nations around the world, which are substantially driving in this location, to obtain extra important force defense assets. The mixture of RADA and Leonardo DRS will open up international marketplace chances, notably in small-array air protection, counter-UAS, counter rockets, artillery and mortars and car safety programs,” reported William J. Lynn III, CEO of Leonardo DRS.

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Evercore is serving as exclusive economic advisor to RADA and J.P. Morgan Securities LLC is serving as unique fiscal advisor to Leonardo DRS. DLA Piper LLP (US) and S. Friedman & Co. are serving as authorized advisors to RADA and Sullivan & Cromwell LLP and Herzog Fox & Neeman are serving as authorized advisors to Leonardo DRS.

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Released by Globes, Israel business news – en.globes.co.il – on June 21, 2022.

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© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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