Harris Corp said on Friday it would purchase Exelis Inc in a deal valued at about $4.75 billion, potentially kicking off a long-expected consolidation of mid-tier suppliers to the U.S. military after years of declining defense budgets.Harris Chief Executive William Brown said the deal was "transformational" and would increase the company's scale, broaden its technology base and expand its customer base in existing markets."This powerful combination creates an industry innovator with much greater scale, providing a broad spectrum of technology-based advanced communications solutions," Brown told analysts. The new company would have combined revenue of $8.2 billion and EBITDA (earnings before interest, taxes, depreciation and amortization) about $1.6 billion, he said."This is the first major merger among mid-tier defense companies. Clearly this was driven by cuts in the Army's budget," said Jim McAleese, a Virginia-based defense consultant.
Exelis Inc. (Exelis) is a diversified, top-tier global aerospace, defense and information solutions company. Shares of XLS remained unchanged at $17.71. In the past year, the shares have traded as low as $14.86 and as high as $20.02. On average, 1058250 shares of XLS exchange hands on a given day and today's volume is recorded at 1866602.
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