Business
BAE Systems plc – Proposed acquisition of Bal...
BAE Systems plc – Proposed acquisition of Bal....
About this update from Bae Systems Plc
[{"type":"text","content":"\n\n \n \nBAE Systems plc (“BAE Systems” or the “Company”) announces that it has entered into a definitive Stock Purchase Agreement to acquire the Ball Aerospace business from Ball Corporation for c.$5.55bn in cash, subject to customary closing adjustments. The proposed stock transaction will be treated as an asset purchase for federal tax purposes, with an expected net present value tax benefit of c.$750m making the underlying economic consideration for the business c.$4.8bn.\n\n\nBall Aerospace is a unique opportunity to strengthen BAE Systems’ world class multi-domain portfolio\n\n\n\nLeading provider of mission critical space systems and defence technologies across air, land and sea domains\n\n\n\nStrong growth potential in areas aligned with the US Intelligence Community and Department of Defense’s highest priorities\n\n\n\nAttractive positioning and outlook across military and civil space, C4ISR and missile and munition markets\n\n\n\nHighly complementary fit adding material scale of high calibre space, optical and antenna solutions\n\n\n\nExcellent cultural fit with a long and distinguished track record of innovation and product development\n\n\n\nSubstantial investment in world class facilities and capabilities in the last five years to support growth\n\n\n\nSubstantial increase to our US classified revenues, offerings and embedded customer relationships\n\n\n\nValue enhancing financial effects\n\n\n\nExpected revenue CAGR of c.10% over the next five years with scope to expand margins\n\n\n\nAccretive to margins and earnings per share in the first year post completion including run-rate cost synergies\n\n\n\nAccretive to cash flow per share in the first year\n\n\n\nROIC expected to exceed WACC within five years post completion\n\n\n\nMultiple of ~13x 2024E EBITDA net of the tax benefit and run-rate cost synergies\n\n\n\nProposed acquisition to be funded by a combination of new external debt and existing cash resources\n\n\n\nBAE Systems structurally compounding investment case\n\n\n\nAttractive and strengthened revenue outlook\n\n\n\nImproved margins and continued expansion potential\n\n\n\nStrong cash conversion\n\n\n\nConsistent with capital allocation policy and allows for continued share buyback activity as announced with the Half Year 2023 results\n\n\n\nCommenting on today’s announcement, Charles Woodburn, Chief Ex...