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‘Unique fit' justifies price in BAE Systems' Armor Holdings deal, claims dealmaker
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| 05 June 2007 |
‘Unique fit' justifies price in BAE Systems' Armor Holdings deal, claims dealmaker
By Guy Anderson
BAE Systems' proposed USD4.53 billion purchase of US armour systems specialist Armor Holdings marks a "high watermark" in terms of price that was justified by the "unique fit" offered by the acquisition, a leading aerospace and defence dealmaker said.
The UK group announced on 8 May that it had entered into a definitive merger agreement under which it would offer USD88 per share for Armor, valuing the company at USD4.14 billion. The assumption of the company's net debt of USD388 million brought the total deal value to USD4.53 billion.
Michael Richter, president of mergers and acquisitions (M&A) advisory group Jeffries Quarterdeck and head of the firm's aerospace and defence investment banking wing, told Jane's: "I think this was at or near the high watermark. It is clear that [Armor Holdings] was very expensive."
He added: "That is not to say that BAE Systems overpaid. This was a unique fill for the group in that it has rounded it out in the land systems sector. It has established BAE as the largest player globally."
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© 2007 Jane's Information Group
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