Market Updates
L3Harris Agreed to Acquire Aerojet Rocketdyne for $4.7 Billion
Scott Peters
19 Dec, 2022
New York City
Aerojet Rocketdyne Holdings Inc increased 1.6% to $55.77 after the company agreed to be acquired by rival L3 Harris Technologies for $58 a share.
Aerojet agreed to pay $4.7 billion in cash including net debt.
Aerojet generated $2.2 billion revenues in 2021 and earned $143.7 million or $1.75 a diluted share.
L3Harris annual revenue in 2021 declined 2% to $17.8 billion and $1.8 billion or $9.09 a diluted share.
In 2019, L3 Technologies merged with Harris Corp and strengthened military communication capabilities in networking and surveillance that are used in F-16, F-118 and F-35 fighter jets.
Aerojet has a funded backlog of $3.1 billion and an unfunded backlog of $3.7 billion of orders totaling $6.8 billion.
Aerojet Rocketdyne delivers a broad range of capabilities to support hypersonics, including solid rocket motor boosters, scramjets, warheads and missile defense technologies, according to the company website.
L3Harris decreased 3.5% to $205.76.
Lockheed Martin led the list of six largest defense contractors followed by Raytheon, Boeing, Northrop Grumman and General Dynamics and the top six contractors generated at least $12 billion in annual revenues from defense contracts.
The latest merger between L3Harris and Aerojet is the continuation of the merger between mid-tier contractors or large contractors snapping up mid-size companies following the growing military spending and stocks trading multi-year highs.
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