E D O (NYSE:EDO)
Historical Stock Chart
From Aug 2019 to Aug 2024
![Click Here for more E D O Charts. Click Here for more E D O Charts.](/p.php?pid=staticchart&s=NY%5EEDO&p=8&t=15)
EDO Corporation (NYSE: EDO) has signed a definitive
agreement to acquire CAS Inc, a privately-held company that provides
engineering services, logistics support, and weapons-systems analysis
to the Department of Defense.
The purchase price of $175.6 million will include a cash payment
of $170.7 million plus restricted EDO common shares valued at $4.9
million. In addition, certain senior managers will receive retention
payments over a three-year period valued at $10 million.
A portion of the cash payment will be made from EDO's current cash
balance, which exceeds $100 million. The remaining amount will be
financed through the company's existing, unused, $300 million credit
facility provided by a bank group led by Citigroup Global Markets Inc.
and Wachovia Capital Markets LLC. The transaction is expected to close
in the third quarter, subject to the customary closing conditions.
CAS is a premier full service provider based in Huntsville, Ala.,
a growing center for the missile-defense, aviation, and logistics
programs of its largest customer, the United States Army. It has
approximately 1,000 employees operating in 13 states, as well as on
military bases worldwide. Revenue for the 12 months ended March 31,
2006 was $184.3 million. Revenue has grown steadily since the
company's founding in 1979, with annual growth averaging more than 18
percent over the past five fiscal years. The acquisition will be
immediately accretive to EDO's earnings.
"This acquisition will significantly increase the breadth and
scale of our professional and engineering services-related revenue
base," said EDO Chief Executive Officer James M. Smith. EDO will
benefit from a substantially increased presence with the Army, while
CAS will benefit from a larger customer base and EDO's broad technical
diversity and capabilities.
"The management team at CAS is well respected within their
customer community, as reflected by their impressive record of wins on
all re-competed contracts over the past ten years. We expect the CAS
team to play a major role along side our current Professional and
Engineering Services team in executing our combined professional
services operational strategy.
"As a result of this acquisition, we see substantial new
opportunities for growth," continued Smith. "We will also strengthen
our ability to serve the expanding Army presence in Huntsville, where
a number of operations will be consolidated as a result of base
closings mandated by the 2005 Base Realignment and Closure round. This
is truly an excellent opportunity for all employees of the combined
organizations to excel as part of a larger, more diverse business."
Services provided by CAS include system engineering and analysis
support for theater missile defense, air defense, aviation, and
land-combat missile systems. A prominent example is the company's
support of the PATRIOT missile program. The current PATRIOT support
contract, valued at $377 million, was awarded in October 2003 and
extends until October 2008.
In 2005 CAS won the Army's Aviation and Missile Command (AMCOM)
Expedited Professional and Engineering Support Services (EXPRESS)
competition in the "Programmatic" domain. EXPRESS is a contractual
vehicle that enables AMCOM to acquire qualified, cost-effective
services in a timely and efficient manner. This significant win will
allow the company to continue as a premier systems-engineering and
technical-assistance contractor providing support to projects at
Redstone Arsenal.
CAS had a funded backlog of $147 million, plus unfunded contracts
and unexercised options of approximately $750 million, as of its
latest fiscal year ended March 31. The company will become part of
EDO's Engineered Systems and Services reporting segment.
BB&T Capital Markets | Windsor Group acted as the exclusive
financial advisor to CAS, Inc. in this transaction.
About EDO Corporation
EDO Corporation designs and manufactures a diverse range of
products for defense, intelligence, and commercial markets. Major
product groups include: Professional and Engineering Services, Defense
Electronics, Communications, Aircraft Armament Systems, Undersea
Warfare, and Integrated Composite Structures. EDO's advanced systems
are at the core of the transformation to lighter, faster, and smarter
defense capabilities.
With headquarters in New York, EDO Corporation (www.edocorp.com)
employs 3,000 people worldwide. The company was founded in 1925 and
had revenues of $648 million in 2005.
Forward-Looking Statements
Certain statements made in this release, including statements
about future revenue and revenue growth, future earnings, and
anticipated financing arrangements are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on current expectations, estimates
and projections about the company's business based, in part, on
assumptions made by management. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions
that are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such
forward-looking statements due to numerous factors, including those
described above and the following: changes in demand for the company's
products and services, product mix, the timing of customer orders and
deliveries, the impact of competitive products and services and
pricing, and other risks discussed from time to time in the company's
Securities and Exchange Commission filings and reports. In addition,
such statements could be affected by general industry and market
conditions and growth rates, and general domestic and international
economic conditions. Such forward-looking statements speak only as of
the date on which they are made, and the company does not undertake
any obligation to update any forward-looking statement to reflect
events or circumstances after the date of this release.