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RADA Agrees To All-Stock Merger With Leonardo DRS

  • RADA Electronic Industries Ltd.RADA, an Israel-based provider of small-form tactical radars, and Leonardo DRS Inc have agreed to merge and become a combined public company.
  • U.S.-based mid-tier defense technology provider Leonardo DRS is a wholly-owned subsidiary of Leonardo S.p.A. FINMY.
  • Leonardo DRS will acquire 100% of the share capital in RADA in exchange for ~19.5% equity ownership in the combined company to RADA shareholders.
  • The combined company will maintain the name Leonardo DRS and is anticipated to trade on NASDAQ and TASE under the symbol “DRS.”
  • RADA will become a wholly-owned subsidiary of Leonardo DRS.
  • RADA expects the transaction to be accretive to earnings per share in year one.
  • The 19.5% ownership in the combined company provided to RADA shareholders was designed to provide a premium of over 20% (based on RADA 30-day VWAP as of June 17, 2022, of $11.76).
  • The combined company had revenue of $2.7 billion and $305 million of Adjusted EBITDA in FY21.
  • The combined company targets a low teen Adjusted EBITDA CAGR through FY23 from an FY21 base of $305 million.
  • Price Action: RADA shares are trading lower by 3.35% at $11.25 and FINMY higher by 10.93% at $5.38 on the last check Tuesday.

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