The consolidation of the aerospace industry continues with the recent announcement that L3Harris Technologies [NYSE: LHX] has signed an agreement to acquire propulsion-system expert Aerojet Rocketdyne Holdings [NYSE: AJRD].
The deal, based on a $58-per-share stock price, all-cash transaction, will be valued at $4.7 billion. Aerojet Rocketdyne currently generates about $2.3 billion annually in revenue. The deal is expected to close in 2023, financed with existing cash alongside the issuance of new debt.
“We’ve heard the [Department of Defense] leadership loud and clear: they want high-quality, innovative and cost-effective solutions to meet both current and emerging threats, and they’re relying upon a strong, competitive industrial base to deliver those solutions,” said Christopher E. Kubasik, L3Harris’ CEO and chair. “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.”
Aerojet Rocketdyne brings 100 years of experience delivering propulsion systems and energetics to the DoD, NASA, and other partners around the world, including both rocket systems for space exploration and those propulsion systems supporting warfighters and other deterrent weapons systems.
For L3Harris, “The acquisition will ensure the defense industrial base and our customers will have a strengthened merchant supplier to effectively address both current and emerging threats—and promote scientific discovery and innovation—through targeted investment in advanced missile technologies, hypersonics and more,” according to a company statement.
“This agreement will accelerate innovation for national security propulsion solutions while providing a premium cash value for our shareholders and tremendous benefits for our employees, customers, partners and the communities in which we operate,” said Eileen P. Drake, CEO and president of Aerojet Rocketdyne.
“Joining L3Harris is a testament to the world-class organization and team we’ve built and represents a natural next phase of our evolution,” Drake said. “As part of L3Harris, 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. This is an exciting new chapter for Aerojet Rocketdyne and our over 5,200 dedicated team members, providing them with additional opportunities, and we look forward to working closely with L3Harris to complete this transaction.”
