Britain’s BAE SYSTEMS last month said it has agreed to acquire MTC Technologies, Inc., [MTCT] in a $450 million deal that gives it access to new customers in the Defense Department for technical solutions and services.
BAE will pay $24 in cash for each share of MTC’s common stock and assume net debt of $81 million. The deal is expected to close in the first half of this year pending approval by regulators and MTC’s shareholders.
MTC, which is based in Dayton, Ohio, will become part of BAE’s Technology Solutions & Services (TSS) business line, which is within the Arlington, Va.-based Customer Solutions operating group. Both company’s have complementary offerings in the technical services area for life-cycle sustainment and support with TSS having a significant presence with Navy programs and MTC well entrenched with Air Force and Army programs.
The acquisition is consistent with BAE’s strategy of growing its U.S.-based business and its services business globally. It is also in line with making BAE’s TSS business a leading provider of life cycle sustainment and support services.
“This acquisition helps us become an even more effective prime contractor and provider of technical solutions and services, which means we will have a greater capability to meet our customers’ most demanding needs, specifically in the areas of readiness and sustainment,” Walt Havenstein, president and CEO of BAE SYSTEMS, Inc., BAE’s corporate headquarters in the United States, said in a statement.
For 2007 MTC expects to post sales of $427 million and net earnings of about $13.7 million. In 2006 the company had $415.5 million in sales and $18.7 million in net earnings.
MTC has about 2,900 employees. The company’s financial adviser on the deal was Raymond James. BAE’s financial adviser was UBS Securities.