BAE to buy Armor Holdings for $4.1 billion
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Manufacturing News, Source : The Manufacturer US
Published : 11 May 2007 15:51
BAE Systems Inc. will acquire armored vehicle maker Armor Holdings Inc. for $4.1 billion, the company said Monday. The American subsidiary of British defense giant BAE Systems Plc. will pay $88 per share for the Jacksonville, FL–based contractor.
Commenting on the proposed acquisition, Mike Turner, BAE Systems’ chief executive, said, “Armor Holdings is a strong business with an excellent track record and a highly regarded management team. The combination of Armor Holdings with BAE Systems’ existing land systems business will strengthen our capabilities to the benefit of the US and UK armed forces and their international allies.”
The deal expands BAE’s presence in the lucrative market for armored Humvees, personnel carriers, and similar equipment used by the US military in Iraq, Afghanistan, and other trouble spots. With the acquisition, BAE gets a company that had $2.4 billion in sales last year, principally from vehicles such as armored trucks, Humvees with additional armor, and equipment that protects soldiers from mine blasts and ambushes.
That market is expected to expand as the US military moves to replace damaged and worn-out wheeled vehicles with new equipment. BAE said Armor Holdings could potentially produce up to 60,000 vehicles in the next 10 years. Experts estimate the market to replace all wheeled military vehicles over the next 20 years could be worth up to $50 billion.
The Rockville, MD–based subsidiary already has approximately $10 billion in annual sales, and the addition of Armor Holdings could increase US sales by up to $3 billion.
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