Aerojet Rocketdyne Holdings has announced that it has entered into a definitive agreement to be acquired by Lockheed Martin Corporation in an all-cash transaction with a total equity value of US$5 billion.
Under the terms of the agreement, which has been unanimously approved by each company’s Board of Directors, Lockheed Martin will acquire Aerojet Rocketdyne for US$56 per share in cash, representing a premium of approximately 33 per cent to Aerojet Rocketdyne’s closing stock price on 18 December 2020 and a premium of approximately 42 per cent to the Company’s volume-weighted average stock price (“VWAP”) for the last 90 trading days.
As part of the transaction, Aerojet Rocketdyne declared a US$5 per share pre-closing special dividend to holders of its common shares and convertible senior notes, on an as-converted basis.
The special dividend will be paid on 24 March 2021, to holders of record as of 10 March 2021.
The payment of this special dividend, unless revoked, will adjust the consideration to be paid by Lockheed Martin to US$51 per share at closing.
Eileen Drake, CEO and president of Aerojet Rocketdyne said, “We are pleased to bring together our complementary companies in a transformative transaction that will provide premium cash value for our shareholders and tremendous benefits for our employees, customers and partners.”
“Joining Lockheed Martin is a testament to the world-class organisation and team we’ve built and represents a natural next phase of our evolution. As part of Lockheed Martin, we will bring our advanced technologies together with their substantial expertise and resources to accelerate our shared purpose: enabling the defence of our nation and space exploration.
“On behalf of the Aerojet Rocketdyne Board and management team, I’d like to thank all of our employees for their unwavering dedication and focus in helping us achieve this great milestone,” Drake added.
The transaction is expected to close in the second half of 2021 and is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by Aerojet Rocketdyne’s stockholders.
A transition team will be formed to allow for a seamless integration and ensure continuity for customers, employees and other stakeholders.
James Taiclet, Lockheed Martin president and CEO, added, “This transaction enhances Lockheed Martin's support of critical US and allied security missions and retains national leadership in space and hypersonic technology. We look forward to welcoming their talented team and expanding Lockheed Martin's position as the leading provider of 21st century warfare solutions.”
Aerojet Rocketdyne has deep customer relationships and significant demand for its innovative technologies. The proposed acquisition adds substantial expertise in propulsion to Lockheed Martin's portfolio, and expands on the solid foundation built by Lockheed Martin and Aerojet Rocketdyne over many years.
Taiclet expanded saying, “Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defence industrial base and reduce costs for our customers and the American taxpayer.”
Aerojet Rocketdyne's propulsion systems are already a key component of Lockheed Martin's supply chain and several advanced systems across its Aeronautics, Missiles and Fire Control and Space business areas.
Aerojet Rocketdyne, a subsidiary of Aerojet Rocketdyne Holdings, Inc, is a world-recognised aerospace and defence leader that provides propulsion systems and energetics to the space, missile defence and strategic systems, and tactical systems areas, in support of domestic and international customers.
Headquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 110,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
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