BAE Systems, the major British manufacturer of aircraft, missiles, avionics, and other aerospace and defence products has agreed to buy NASA supplier Ball Aerospace for £4.4 billion ($5.5 billion).
As the British aerospace defence giant ventures further into space warfare, BAE Systems has entered into a definitive Stock Purchase Agreement to acquire the Ball Aerospace business from Ball Corporation subject to customary closing adjustments.
BAE Systems say purchasing Ball Aerospace is a unique opportunity to strengthen their world class multi-domain portfolio.
Charles Woodburn, Chief Executive of BAE Systems, said:
“The proposed acquisition of Ball Aerospace is a unique opportunity to add a high quality, fast growing technology focused business with significant capabilities to our core business that is performing strongly and well positioned for sustained growth. It’s rare that a business of this quality, scale and complementary capabilities, with strong growth prospects and a close fit to our strategy, becomes available.
“The strategic and financial rationale is compelling, as we continue to focus on areas of high priority defence and Intelligence spending, strengthening our world class multi-domain portfolio and enhancing our value compounding model of top line growth, margin expansion and high cash generation.
“We couldn’t be more pleased to have reached this agreement and we look forward to welcoming the employees of Ball Aerospace to BAE Systems as we work together to support our customers and create value for shareholders.”
Ball Aerospace is a leading provider of spacecraft, mission payloads, optical systems, and antenna systems with decades of proven success underpinned by world class advanced technologies. They have trusted customer relationships among the Intelligence Community, US Department of Defense, and civilian space agencies. The business has been a pioneer in its markets for many decades and is organised into four main divisions: National Defense, Tactical Solutions, Civil Space, and Advanced Technology and Information Solutions.
The business operates across a broad base of customers and platforms. It is well positioned in highly attractive markets, military and civil space, C4ISR, and missile and munitions. The space market exposure extends across positions in defence, intelligence, and scientific missions. The Tactical Solutions business is well positioned to capture expected increases in demand for missiles and munitions.
The business is headquartered in Colorado, with more than 5,200 employees, of whom over 60% hold US security clearances.
Ball Aerospace has a long and distinguished track record as a trusted partner and pioneering innovator. Over the last five years, the company has demonstrated its ability to convert its highly differentiated capabilities into a strong order backlog that has nearly doubled in size. It has invested around $1 billion in world class facilities and capabilities which, combined with its highly skilled workforce, positions the business to deliver continued growth for years to come.
The proposed acquisition represents an exceptional opportunity to strengthen the BAE System portfolio with significant scale and high end technology capabilities. Ball Aerospace will add more than $2 billion in annual revenues in the growing space domain, C4ISR and missile and munitions markets. The acquisition will provide BAE Systems US business with a position in some of the fastest growing segments of the defence market and further increases our alignment to enduring customer priorities embodied in the US National Defense Strategy.
BAE Systems say: “The growth outlook, anticipated at a c.10% CAGR over the next five years will build on our US business’ existing strong portfolio by expanding our footprint in space by an order of magnitude, offering a complementary set of customer relationships in the national security space community, and providing new access to civil space markets. In addition, Ball’s expertise in spacecraft, mission payloads, optical systems, sensors, scientific and tactical systems, analytical tools, and world class antenna systems support a broad set of products and differentiated technologies to address the growing space, C4ISR and missile and munitions markets.”
The proposed acquisition will be funded by a combination of new external debt and existing cash resources.
