By Calvin Biesecker
Boeing [BA] yesterday said it has agreed to acquire C4ISR specialist Argon ST [STST] for $775 million in cash, advancing its capabilities in the C4ISR, cyber and intelligence markets.
Boeing is offering Argon ST’s shareholders $34.50 per share, a 41 percent premium over the Tuesday closing price of $24.43.
“Combining the strength of Boeing with the experience of Argon ST will significantly accelerate our capabilities in sensors, communications technologies and information management,” Dennis Muilenburg, president and CEO of Boeing Defense, Space & Security, said in as statement.
Argon ST designs, develops and produces signals intelligence sensors for sea, air and land operations, systems for reconnaissance, communications, intelligence, surveillance and force protection, and network communications. The Virginia-based company also provides a range of systems integration, engineering and software services.
Boeing said the deal will be immaterial to its earnings. The transaction is expected to close by the end of September subject to regulatory approval and a majority of the outstanding Argon ST shares being tendered. Argon ST’s board of directors has approved the transaction.
Argon ST had $366 million in sales in FY ’09 and expects sales between $370 million and $390 million and operating income in the range of $37 million to $42 million.
Stone Key Partners, LLC, is the financial adviser to Argon ST, which has been reviewing its strategic alternatives since at least the start of this year (Defense Daily, Jan. 13). Argon ST was created nearly six years ago through the merger of privately owned Argon Engineering Associates Inc. and publicly-owned Sensytech, Inc. (Defense Daily, Oct. 1, 2004).
Argon ST’s management will remain with Boeing and operate as a subsidiary of the Network and Space Systems business within Boeing’s defense segment.