E D O (NYSE:EDO)
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EDO Corporation (NYSE: EDO) has signed a definitive
agreement to acquire Impact Science & Technology Inc (IST), a
privately-held company that provides Signals Intelligence (SIGINT)
systems and analysis support to the intelligence community, and
advanced countermeasures and electronic-attack systems to the DOD and
other government agencies.
EDO will purchase all of the outstanding shares of the company for
$124 million, consisting of a cash payment of $106 million and an $18
million promissory note to be paid over three years. This results in a
purchase price of $113 million net of the company's cash balance of
$11 million at the time of the offer. The definitive agreement
includes a purchase price adjustment based on changes in the company's
net book value at the time of the closing. In addition, certain senior
managers will receive retention payments in the form of restricted
common shares valued at approximately $9 million.
EDO will fund the acquisition from its current cash balance and
its existing $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.
IST has approximately 200 employees and is based in Nashua, N.H.,
with additional operations in Maryland and Colorado. Revenue for the
12 months ended March 31, 2006 was $63 million. Over the past five
years, revenue has grown at a compound annual growth rate of 60
percent. IST will become part of the Electronic Systems and
Communications reporting segment, and will be immediately accretive to
EDO's earnings.
"IST will greatly increase our presence with key customers in the
intelligence community, DOD, and Homeland Security," said EDO Chief
Executive Officer James M. Smith. "Combining the SIGINT and advanced
countermeasure technologies of IST with EDO's specialized
surveillance, communications, and force-protection products will
strengthen our presence in a number of strategically important,
growing business areas.
"IST has some unique capabilities that have been recognized by its
customers. As part of EDO, these capabilities can be enhanced to an
even larger scale."
Much of the work done by IST is classified. The company's products
involve Electronic Intelligence (ELINT) collection and storage
systems, software products, and systems engineering and analysis
services for the intelligence community. IST also provides advanced
radar countermeasures, electronic attack and information warfare
systems for the DOD and other government agencies.
About EDO Corporation
EDO Corporation designs and manufactures a diverse range of
products for defense, intelligence, and commercial markets, and
provides related engineering and professional services.
Major product groups include: Defense Electronics, Communications,
Aircraft Armament Systems, Undersea Warfare, Professional and
Engineering Services, 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, 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.