By On November 4, Kratos Defense & Security Solutions, Inc. announced that it has signed a definitive agreement to acquire 100 percent of the ordinary shares of Orbit Technologies Ltd for $356.3 million, which is expected to be funded via cash on Kratos’ balance sheet.
Orbit is a leading global provider of mission-critical satellite-based communication systems for mobile and unmanned aerial, seaborne, undersea and land systems, military vehicles and other systems. Orbit provides its hardware, products and systems to major air forces, traditional prime contractors and emerging new defense and space companies. Orbit’s customers are worldwide, including Israel, the United States, Europe and the Pacific region. Once the acquisition is consummated, Orbit will report through Kratos’ Microwave Electronics Division (KMED), which is headquartered in Jerusalem, Israel. The acquisition of Orbit is expected to be immediately accretive across virtually every financial metric for Kratos.
Yonah Adelman, president of Kratos Microwave Electronics, said, “We are truly excited about the combining of Orbit with Kratos, both leading technology companies in the microwave, communications and other military and national security related areas. KMED has been methodically focused on growing its presence in the rapidly expanding global unmanned systems and satellite-based communications market areas, and we believe that Kratos and Orbit is a 1 + 1 = 3 or more situation for our customers, partners, employees and stakeholders. We have already identified areas where Kratos’ microwave technology combined with Orbit’s communications technology, could bring differentiating, leading capabilities to the market. We are excited to welcome Orbit to Kratos.”
Eric DeMarco, president and CEO of Kratos, said, “Orbit checks every box in a Kratos acquisition, including outstanding leadership and culture, mission-committed employees and leading technology, with real, battle-proven hardware, products and systems that are in Kratos’ sweet spot. Additionally, major customers of Orbit are also existing customers of Kratos, including in Israel, the United States, Europe, India and elsewhere, adding to our conviction in this transaction’s projected success for all parties involved, including Kratos shareholders. The combination of Kratos’ microwave technology and Orbit’s communications technology is expected to provide new growth opportunities that are not currently available to either company on a stand-alone basis. There is a global recapitalization of weapon systems underway, and Orbit significantly advances Kratos’ position to take advantage of this. Importantly, this was a negotiated transaction between Kratos and Orbit, which significantly reduced disruption to both companies’ operations and the commitment to our national security focused mission.”
Daniel Eshchar, CEO of Orbit Communication Systems, said, “I am honored by the opportunity to join a leading global defense company. This milestone marks a significant step for Orbit, enabling us to expand our business operations and strengthen our presence in the U.S. defense market.”
Source: Kratos Defense
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