Netanya-primarily based Israeli protection enterprise RADA Electronic Industries Ltd. (TASE: RADA Nasdaq: RADA), which creates tactical radar programs, is merging with US organization Leonardo DRS Inc. The inventory-primarily based transaction will outcome in RADA’s current shareholders keeping 19.5% of the merged organization. The deal is expected to close in the fourth quarter of this year. RADA will come to be a wholly-owned subsidiary of Leonardo DRS, which will be mentioned on Nasdaq and on the Tel Aviv Stock Exchange underneath the symbol DRS. The terms of the deal represent a 34% quality around RADA’s closing share value yesterday, valuing the corporation at $775 million.

The put together enterprise is predicted to produce EBITDA as a share of revenue in the very low double-digits in 2023. The merged business experienced $2.7 billion profits and $305 million adjusted EBITDA in 2021. At the end of the first quarter of 2022, the blended enterprise experienced credit card debt of about $197 million.

RADA is a veteran organization that for most of its existence dealt in avionics. Around a ten years back, it entered a new field, that of sophisticated application-outlined armed service tactical radars. The radars are mounted on armed service motor vehicles and run on the move. They thus deliver ground forces with lively defense, this sort of as in opposition to mortars and assault drones. The enterprise is also nonetheless active in its standard field of avionics.

“RADA and Leonardo DRS are powerful and complementary technological know-how firms, and their shut historical partnership through collaboration on multiple programs, has resulted in a deep cultural match,” the companies’ announcement mentioned.

The announcement also mentioned that “Leonardo DRS’s father or mother enterprise and sole shareholder, Leonardo SpA, is a major world Aerospace and Protection corporation. Leonardo SpA’s marketplace posture will present accessibility to a reshaped European defense marketplace as nicely as defense marketplaces all over the entire world, although also creating a house current market in Israel.”

RADA CEO Dov Sella reported, “I could not be prouder of the platform we have constructed all through my practically 20 yrs with RADA, culminating in this important strategic transaction with Leonardo DRS. The combination of two main technological innovation-focused protection companies with diversified publicity to important US Section of Defense systems and an worldwide existence creates a legitimate earn-gain for RADA and Leonardo DRS shareholders.

“The transaction signifies the initially time a key US-primarily based defense firm backed by a world wide defense key has obtained a major Israeli protection know-how corporation. This exclusive transaction will reinforce the Israeli protection market and established tendencies and course for the future.”




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“The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the require for modern, able power security systems. Not only is this accelerating US buys of these methods, but it is going European nations, which are significantly driving in this area, to get extra important power protection belongings. The mix of RADA and Leonardo DRS will open up worldwide marketplace possibilities, notably in short-range air protection, counter-UAS, counter rockets, artillery and mortars and automobile security devices,” said William J. Lynn III, CEO of Leonardo DRS.

Evercore is serving as exceptional economical advisor to RADA and J.P. Morgan Securities LLC is serving as unique money 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 lawful advisors to Leonardo DRS.

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

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


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