US defense major Lockheed Martin has entered into a definitive agreement to acquire rocket engine manufacturer Aerojet Rocketdyne Holdings in an all-cash transaction with a total equity value of $5 billion.
Lockheed said it is acquiring Aerojet Rocketdyne for $56 per share in cash, which is expected to be reduced to $51 per share after the payment of a pre-closing special dividend. This represents a post-dividend equity value of $4.6 billion and a total transaction value of $4.4 billion including the assumption of net cash.
As part of approving the transaction, Aerojet Rocketdyne announced a special cash dividend of $5 per share to its holders of record of common stock and convertible senior notes (on an as-converted basis, and revocable at its option through the payment date) as of the close of business on March 10, 2021, and payable on March 24, 2021.
The transaction is expected to close in the second half of 2021 and is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by Aerojet Rocketdyne’s stockholders
“Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer,” said James Taiclet, Lockheed Martin president and CEO.
With 2019 revenue of approximately $2 billion, nearly 5,000 employees, and 15 primary operations sites across the United States, Aerojet Rocketdyne is an aerospace and defense rocket engine manufacturer. Aerojet Rocketdyne’s propulsion systems are already a key component of Lockheed Martin’s supply chain and several advanced systems across its aeronautics, missiles and fire control and space business areas.
