Raytheon (RTN) will buy Applied Signal Technology (APSG) for $38/share, or ~$490M net of cash acquired. The deal marks an 8.5% premium to APSG's Friday closing price, and isn't expected to have a material effect on Raytheon's earnings. (PR)
Sources say 4 defense contractors have bid for electronic surveillance and intelligence company Applied Signal Technology (APSG -0.1%), now on the auction block. Reflecting changing military budget priorities, the defense industry desperately needs cybersecurity capabilities. Other potential buyout targets include Essex Corp. (KEYW +1%) and Mercury Computer Systems (MRCY +1.%).
Applied Signal (APSG +13%) says it will "explore a broad range of strategic alternatives," including a sale or merger. The company retains Merrill Lynch (BAC) as its financial advisor. Trading halted after-hours. (PR)
Sources say Applied Signal Technology (APSG) has hired advisors (BAC) to explore a sale that could see interest from Raytheon (RTN), Northrop Grumman (NOC), Boeing (BA), L-3 Communications (LLL) and Lockheed Martin (LMT). APSG's technology is used by the government to intercept cellphone, microwave and military communication signals. APSG +3% premarket.