James Taiclet President and CEO Lockheed Martin

Lockheed Strikes $4.4B Deal for Aerojet Rocketdyne; James Taiclet, Eileen Drake Quoted

Lockheed Martin (NYSE: LMT) has agreed to acquire Aerojet Rocketdyne (NYSE: AJRD) for approximately $4.4B in a move to expand capabilities in the areas of hypersonics, space exploration, integrated air and missile defense and tactical missiles.

Lockheed said Sunday it expects to close the transaction in the second half of this year, pending approval by Aerojet Rocketdyne’s stockholders, regulatory clearances and other customary closing conditions.

“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” said James Taiclet, president and CEO of Lockheed. “This transaction enhances Lockheed Martin’s support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology.”

Lockheed will pay $56 per share in cash for Aerojet Rocketdyne, reflecting a 33 percent premium to Aerojet’s closing stock price Friday. The acquisition price will be reduced to $51 per share once the payment of a pre-closing special dividend of $5 per share is made on March 24.

Aerojet Rocketdyne is a manufacturer of defense and aerospace rocket engines with approximately $2B in 2019 revenue. The company operates 15 sites across the U.S. with nearly 5K employees and is expected to bring to Lockheed’s portfolio its expertise and capabilities in propulsion.

“As part of Lockheed Martin, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defense of our nation and space exploration,” said Eileen Drake, president and CEO of Aerojet Rocketdyne.

The companies said a transition team will be created to facilitate the integration and ensure continuity for employees, clients and other stakeholders.

Aerojet Rocketdyne said Citigroup Global Markets and Evercore served as its co-lead financial advisers in the transaction, while Jenner & Block and Gibson, Dunn & Crutcher acted as its M&A and securities counsel, respectively.

The transaction came nearly a month after Lockheed closed its purchase of the hypersonic strike and defense business of Huntsville, Alabama-based software and systems engineering firm Integration Innovation Inc.

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