Mercury Systems, Inc. [MRCY] last Thursday evening said it is in negotiations to acquire for about $175 million in cash Themis Computer, a company that provides rugged computing solutions for military, aerospace, energy, and commercial applications.
Mercury disclosed the talks for Themis in a filing with the Securities and Exchange Commission after the company inadvertently posted a draft press release on its website of the potential deal.
In the regulatory disclosure, Massachusetts-based Mercury says the acquisition price is subject to net working capital and net debt adjustments, adding that Themis is expected to generate about $57 million in sales this year with pre-tax operating margins of about 23 percent.
Themis is a Silicon Valley-based company that develops and produces a range of servers, hyper-converged computing systems, small form factor tactical systems and servers, and switches, and storage systems for U.S. and international markets.The company’s customers include Raytheon [RTN], Lockheed Martin [LMT], General Dynamics [GD], and others within the defense industry.
Mercury is a provider of sensor and mission processing subsystems for the defense industry.
Mercury said that if it concludes the deal it will be immediately accretive to earnings.
Mercury expects sales in its current fiscal year, which ends June 30, 2018, to be between $457 million and $468 million, with net income between $37.8 million and $40.7 million. The forecast excludes potential impacts of the Themis deal.
Mercury did not reply to queries for additional comment about the deal with Themis.
Jefferies defense analyst Sheila Kahyaoglu said in a client note on Thursday that the Themis acquisition would complement Mercury’s “server business in addition to its investment in secure rack mounting servers.”