L3Harris Technologies (NYSE: LHX) has agreed to acquire Aerojet Rocketdyne (NYSE: AJRD) for approximately $4.7 billion in cash, or $58 per share, in a transaction that will allow the aerospace and defense contractor to further advance innovation and continue to deliver missile defense systems, hypersonics and other capabilities to the Department of Defense.
Melbourne, Florida-based L3Harris said Sunday it expects the transaction to close in 2023, pending regulatory approvals and other customary closing conditions.
Christopher Kubasik, chair and CEO of L3Harris, said DOD leaders have expressed their need for innovative platforms to meet existing and emerging threats and are relying on the defense industrial base to deliver such platforms.
“With this acquisition, we will use the combined talents of more than 50,000 employees to drive continuous process improvement, enhance business operations and elevate the performance of this crucial national asset,” added Kubasik, a three-time Wash100 awardee.
Aerojet Rocketdyne produces propulsion systems and energetics for DOD, NASA and other domestic and international customers. The company has over 5,200 employees and approximately $2.3 billion in annual revenue.
L3Harris said it will fund the acquisition with the issuance of new debt and existing cash.
Lockheed Martin (NYSE: LMT), which agreed to buy Aerojet for approximately $4.4 billion in December 2020, decided to drop the deal in February weeks after the Federal Trade Commission filed an antitrust lawsuit to block the planned merger.
Eileen Drake, president and CEO of Aerojet Rocketdyne, said the company will combine its advanced technologies with L3Harris’ resources and expertise to help advance space exploration and strengthen national defense.
L3Harris’ financial advisers in the transaction are Barclays Capital and Goldman Sachs & Co., while Simpson Thacher & Bartlett acts as its legal counsel.
Citi and Evercore serve as Aerojet Rocketdyne’s co-lead financial advisers and Wachtell, Lipton, Rosen & Katz advises the rocket engine manufacturer on the deal’s legal aspect.
The transaction is the second purchase deal that L3Harris announced in 2022. In October, L3Harris agreed to buy the tactical data link portfolio of Viasat (Nasdaq: VSAT) for about $1.96 billion.