Netanya-dependent Israeli defense corporation RADA Digital Industries Ltd. (TASE: RADA Nasdaq: RADA), which creates tactical radar systems, is merging with US business Leonardo DRS Inc. The stock-primarily based transaction will end result in RADA’s current shareholders holding 19.5% of the merged corporation. The deal is envisioned to shut in the fourth quarter of this calendar year. RADA will become a wholly-owned subsidiary of Leonardo DRS, which will be listed on Nasdaq and on the Tel Aviv Inventory Trade beneath the image DRS. The conditions of the deal symbolize a 34% high quality in excess of RADA’s closing share rate yesterday, valuing the enterprise at $775 million.

RADA employs 255 men and women in Israel and 80 in the US.

The mixed business is expected to create EBITDA as a share of revenue in the low double-digits in 2023. The blended business experienced $2.7 billion earnings and $305 million adjusted EBITDA in 2021. At the conclusion of the very first quarter of 2022, the blended business had financial debt of around $197 million.

RADA is a veteran corporation that for most of its existence dealt in avionics. In excess of a decade ago, it entered a new field, that of highly developed program-defined military services tactical radars. The radars are mounted on armed service motor vehicles and function on the shift. They hence supply ground forces with lively defense, these kinds of as against mortars and attack drones. The corporation is also even now energetic in its classic discipline of avionics.

“RADA and Leonardo DRS are sturdy and complementary technological innovation businesses, and their close historic relationship through collaboration on a number of courses, has resulted in a deep cultural in good shape,” the companies’ announcement mentioned.

The announcement also mentioned that “Leonardo DRS’s parent firm and sole shareholder, Leonardo SpA, is a main world-wide Aerospace and Defense company. Leonardo SpA’s sector situation will offer access to a reshaped European defense market as perfectly as protection markets all over the earth, when also developing a property industry in Israel.”

RADA CEO Dov Sella reported, “I could not be prouder of the system we have crafted in the course of my just about 20 a long time with RADA, culminating in this essential strategic transaction with Leonardo DRS. The blend of two leading technological innovation-focused defense corporations with diversified publicity to important US Department of Defense packages and an intercontinental existence results in a accurate acquire-win for RADA and Leonardo DRS shareholders.

“The transaction represents the very first time a important US-based mostly defense business backed by a world-wide protection prime has acquired a sizeable Israeli defense engineering organization. This special transaction will improve the Israeli protection field and established tendencies and way for the long run.”




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“The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the need to have for present day, able power security systems. Not only is this accelerating US purchases of these methods, but it is shifting European nations, which are significantly driving in this spot, to get far more important pressure protection belongings. The combination of RADA and Leonardo DRS will open up worldwide marketplace alternatives, particularly in short-variety air protection, 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 economic advisor to RADA and J.P. Morgan Securities LLC is serving as special fiscal advisor to Leonardo DRS. DLA Piper LLP (US) and S. Friedman & Co. are serving as lawful advisors to RADA and Sullivan & Cromwell LLP and Herzog Fox & Neeman are serving as lawful advisors to Leonardo DRS.

Published by Globes, Israel company news – en.globes.co.il – on June 21, 2022.

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