Harris Corporation (NYSE:HRS) has entered into a definitive agreement to acquire CapRock Communications for a reported price of $525 million.
According to Harris, “CapRock’s audited financial statements for calendar year 2009 included revenue of $359 million; earnings before interest, taxes, depreciation and amortization (EBITDA) of $54 million; and operating income of $28 million. The acquisition is expected to be slightly accretive to Harris earnings in fiscal year 2011, excluding acquisition-related charges, and a more significant contributor to earnings in fiscal year 2012. The transaction is subject to customary regulatory reviews, FCC license approvals, and closing conditions, and it is expected to close during the first quarter of fiscal 2011. Harris will finance the acquisition using a combination of cash on hand, commercial paper, and borrowings under its committed credit facilities.”
“Acquiring CapRock expands our international presence and customer base, while increasing the breadth of our assured communications offerings. We see increasing demand for outsourced managed communications services that include secure high-availability networks, creating growth opportunities across a variety of markets, ” said Howard L. Lance, chairman, president and CEO of Harris. “The acquisition provides an entry into the energy market, while expanding our present offering for the government and maritime markets to include managed satellite communications solutions. CapRock is a facilities-based global service provider that has made significant strategic investments in a self-owned and operated infrastructure to support demanding customer requirements. CapRock is a very successful company that shares our passion and commitment to mission-critical communications. It has an experienced management team with a track record of double-digit growth and profitability.”