Harris finishes Exelis acquisition
NewsJune 10, 2015
MELBOURNE, Fla. Harris Corp. officials announced that the company completed its previously announced acquisition of Exelis Inc. for about $4.75 billion.
"With about $8 billion in combined pro forma revenue, the acquisition creates significantly greater scale, bringing together two engineering-driven companies and workforces with similar cultures that value technology leadership," says William M. Brown, chairman, president and chief executive officer of Harris.
Each outstanding share of Exelis common stock converted into the right to receive $16.625 in cash and 0.1025 of a share of Harris common stock. Harris shareholders own 85 percent of the combined company and Exelis shareholders own 15 percent.
"Our 2014 was another strong year, and we expect to report revenue of approximately $3.25 billion and adjusted operating margin between 12.4 and 12.5 percent, which is in line with our previous guidance," says David F. Melcher, chief executive officer and president of Exelis.
Exelis indicated that approximately $25 million of its anticipated free cash flow for 2014 shifted into 2015 due to some delayed collections, but that its estimate for 2015 free cash flow is being increased to approximately $275 million, according to the earlier Harris announcement. Exelis also expects depreciation and amortization of approximately $106 million in 2014, net debt of $139 million and a net unfunded pension liability of approximately $1.9 billion at the end of 2014. Exelis ended the year with an estimated $2.8 billion in funded backlog.
The transaction is expected to be somewhat accretive on a GAAP basis to Harris in the first full year and a significant contributor thereafter. Harris is executing its detailed integration plan to deliver significant and lasting value for all stakeholders. The company expects to provide fiscal 2016 guidance on its fourth quarter fiscal 2015 earnings call.
