GD To Acquire Division of Motorola For $825 Million

Monday, August 06, 2001
Defense contractor General Dynamics Corp. on Monday said it agreed to acquire a division of wireless technology giant Motorola Inc. for $825 million, in a move to strengthen its communications and information technology operations.

The deal, which is expected to close in 60 days, would enhance General Dynamics' earnings immediately, the Falls Church, Va.-based company said.

It is buying Motorola's Integrated Information Systems Group (IISG) based in Scottsdale, Ariz., which provides defense and other government customers with technologies, products and systems for secure communications and integrated communication systems.

The business would become part of General Dynamics' Information Systems and Technology group.

A top General Dynamics official said that the company expects the acquisition to add $100 million of earnings before interest and taxes for 2002 on revenues of $830 million.

This will add to the $2.4 billion in revenues General Dynamics already records from its existing communications and IT business.

General Dynamics, which is paying for the transaction through debt, is also assuming certain liabilities of the Motorola unit. Rating agency Standard & Poor said the deal would have no impact on its current 'stable' rating.

Besides strengthening General Dynamics' position in communications and information technology for military and government customers, General Dynamics said in a statement, the deal will enhance company capabilities in command, control, communication, computers, intelligence, surveillance and reconnaissance.

From Motorola's point of view this was a step toward strengthening its balance sheet by getting out of an area that was never a core strength. With more than $10 billion in short- and long-term debt, Motorola has been under pressure to get out of non-strategic areas.

"It's a very small piece of Motorola's business. It's not crucial to what they're trying to do. They got one times sales, which is in this environment about the same value that Motorola is trading at as a price to sales ratio," said an analyst at Merrill Lynch.

As part of the transaction, Motorola also offered General Dynamics access to some of its select technologies including encryption capability and software defined radio, a type of wireless communication.

Investment bank Goldman Sachs helped Motorola to sell the business to General Dynamics.

Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

India's Reliance Q4 Sales Rise

Indian energy company Reliance Industries Ltd posted nearly flat fourth-quarter profits, in line with estimates, as a slimmer margin in its oilrefining business offset higher revenue.

Schlumberger Announces Q1 Results

Schlumberger Limited (NYSE:SLB) today reported first-quarter 2014 revenue from continuing operations of $11.24 billion versus $11.91 billion in the fourth quarter of 2013, and $10.

New sanctions threats as Ukraine stalemate goes on

A day after an international deal in Geneva to defuse the East-West crisis in Ukraine, pro-Russian separatists vowed not to end their occupation of public buildings

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Navigation Pipelines Pod Propulsion Salvage Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2654 sec (4 req/sec)