Netanya-centered Israeli defense firm RADA Electronic Industries Ltd. (TASE: RADA Nasdaq: RADA), which produces tactical radar systems, is merging with US firm Leonardo DRS Inc. The stock-based transaction will outcome in RADA’s present shareholders holding 19.5% of the merged company. The deal is expected to near in the fourth quarter of this calendar year. RADA will turn into a wholly-owned subsidiary of Leonardo DRS, which will be shown on Nasdaq and on the Tel Aviv Stock Exchange under the image DRS. The phrases of the deal signify a 34% premium over RADA’s closing share cost yesterday, valuing the corporation at $775 million.

RADA employs 255 persons in Israel and 80 in the US.

The put together organization is expected to make EBITDA as a proportion of income in the low double-digits in 2023. The blended organization experienced $2.7 billion revenue and $305 million adjusted EBITDA in 2021. At the finish of the initially quarter of 2022, the mixed business had personal debt of around $197 million.

RADA is a veteran company that for most of its existence dealt in avionics. Around a decade back, it entered a new industry, that of superior software package-described navy tactical radars. The radars are mounted on armed forces autos and operate on the move. They thus provide floor forces with lively safety, these as versus mortars and assault drones. The firm is also continue to energetic in its common field of avionics.

“RADA and Leonardo DRS are robust and complementary technologies providers, and their near historical connection via collaboration on many packages, has resulted in a deep cultural match,” the companies’ announcement explained.

The announcement also stated that “Leonardo DRS’s dad or mum corporation and sole shareholder, Leonardo SpA, is a major global Aerospace and Protection business. Leonardo SpA’s marketplace place will supply accessibility to a reshaped European protection current market as effectively as protection marketplaces all-around the globe, whilst also setting up a residence industry in Israel.”

RADA CEO Dov Sella stated, “I could not be prouder of the platform we have developed all through my nearly 20 years with RADA, culminating in this vital strategic transaction with Leonardo DRS. The blend of two leading technological know-how-focused protection companies with diversified publicity to key US Department of Defense programs and an intercontinental presence makes a legitimate gain-acquire for RADA and Leonardo DRS shareholders.

“The transaction signifies the to start with time a big US-primarily based protection business backed by a world wide defense primary has acquired a considerable Israeli protection technologies firm. This unique transaction will reinforce the Israeli protection market and set developments and direction for the potential.”




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“The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the need for modern day, capable force protection systems. Not only is this accelerating US purchases of these systems, but it is relocating European countries, which are considerably guiding in this location, to receive a lot more critical drive defense belongings. The mixture of RADA and Leonardo DRS will open up worldwide marketplace alternatives, notably in brief-range air defense, counter-UAS, counter rockets, artillery and mortars and automobile safety methods,” explained William J. Lynn III, CEO of Leonardo DRS.

Evercore is serving as special monetary advisor to RADA and J.P. Morgan Securities LLC is serving as special economical advisor to Leonardo DRS. DLA Piper LLP (US) and S. Friedman & Co. are serving as authorized advisors to RADA and Sullivan & Cromwell LLP and Herzog Fox & Neeman are serving as lawful advisors to Leonardo DRS.

Released by Globes, Israel business news – en.globes.co.il – on June 21, 2022.

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