(IN BRIEF) BAE Systems has announced its intention to acquire Ball Aerospace from Ball Corporation for approximately $5.55 billion in cash, subject to customary closing adjustments. The acquisition aims to strengthen BAE Systems’ multi-domain portfolio by adding Ball Aerospace’s capabilities in space systems and defense technologies across air, land, and sea domains. The acquisition aligns with BAE’s strategy of focusing on high-priority defense and intelligence spending, and it is expected to provide significant growth potential, enhance revenue and margins, and increase the company’s alignment with the US National Defense Strategy. The proposed acquisition is projected to be completed in the first half of 2024, subject to regulatory approvals.
(PRESS RELEASE) FARNBOROUGH, 18-Aug-2023 — /EuropaWire/ —
Ball Aerospace is a unique opportunity to strengthen BAE Systems’ world class multi-domain portfolio
- Leading provider of mission critical space systems and defence technologies across air, land and sea domains
- Strong growth potential in areas aligned with the US Intelligence Community and Department of Defense’s highest priorities
- Attractive positioning and outlook across military and civil space, C4ISR and missile and munition markets
- Highly complementary fit adding material scale of high calibre space, optical and antenna solutions
- Excellent cultural fit with a long and distinguished track record of innovation and product development
- Substantial investment in world class facilities and capabilities in the last five years to support growth
- Substantial increase to our US classified revenues, offerings and embedded customer relationships
Value enhancing financial effects
- Expected revenue CAGR of c.10% over the next five years with scope to expand margins
- Accretive to margins and earnings per share in the first year post completion including run-rate cost synergies
- Accretive to cash flow per share in the first year
- ROIC expected to exceed WACC within five years post completion
- Multiple of ~13x 2024E EBITDA net of the tax benefit and run-rate cost synergies
- Proposed acquisition to be funded by a combination of new external debt and existing cash resources
BAE Systems structurally compounding investment case
- Attractive and strengthened revenue outlook
- Improved margins and continued expansion potential
- Strong cash conversion
- Consistent with capital allocation policy and allows for continued share buyback activity as announced with the Half Year 2023 results
Commenting on today’s announcement, 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 Space and Defence technology leader
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 high revenue visibility and strong growth outlook
The business has a long and distinguished track record as a trusted partner and pioneering innovator. Over the last five years, Ball Aerospace 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 $1bn 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 our portfolio with significant scale and high end technology capabilities. Ball Aerospace will add more than $2bn in annual revenues in the growing space domain, C4ISR and missile and munitions markets. The acquisition will provide our 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.
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.
Highly complementary fit with BAE Systems portfolio and culture
The Ball Aerospace portfolio is highly complementary and offers a number of adjacencies to our US-based business, with particular opportunities to advance a number of franchise positions across multiple Electronic Systems businesses. On completion we expect to report Ball Aerospace as part of that sector.
We believe this proposed acquisition provides compelling value and an exciting future, underpinned by our companies’ shared culture of innovation and strong, mission-driven values. Our mission of We Protect Those Who Protect Us® resonates with the Ball Aerospace team, and our adjacent and augmented positions across the defence, intelligence, and scientific markets will strengthen our outlook and benefit BAE Systems, the Ball Aerospace business, and customers alike.
Strong synergy potential
With complementary adjacencies, Ball Aerospace and our US business will have expanded opportunities to create, develop, and manufacture solutions to some of our customers’ most challenging problems. It will position us to capture anticipated future market growth driven by modernisation and recapitalisation requirements. The differentiated products and capabilities in Ball Aerospace will also offer further acceleration of our pursuit of next-generation solutions across a number of our US businesses like Electronic Warfare and C4ISR as they address future customer demand.
In addition to these top line opportunities, we expect there to be cost synergies c.$30m p.a run rate, with savings resulting from improved competitive positioning, procurement savings, and improved programme execution and management of bids to delivery, all contributing to margin expansion.
The synergistic nature of the combined portfolio supports growth in adjacent areas for both our US business and Ball Aerospace, and adds further resilience to our existing franchises in the face of evolving customer needs and emerging technologies.
Value enhancement
The business is expected to achieve revenues of approximately $2.2bn and adjusted EBITDA of approximately $310m in 2023 and has strong growth potential with an expected revenue CAGR of c.10% over the next five years, with continued growth expected thereafter. EBIT margins are expected to be around 12% post cost synergies over the medium term. It is an acquisition that aligns with and enhances our value compounding model of good sustained organic growth, margin expansion and strong cash generation.
The net acquisition price of c.$4.8bn represents a transaction multiple of ~ 13x estimated 2024 EBITDA net of the tax benefit and net of run-rate cost synergies. The proposed acquisition is expected to be earnings accretive in the first full year including run-rate cost synergies, cashflow accretive in the first year excluding synergies and is expected to achieve a return on invested capital in excess of cost of capital within five years post completion.
The proposed acquisition will be funded by a combination of new external debt and existing cash resources.
Our capital allocation policy remains unchanged. We are committed to a strong investment grade credit rating and will continue the ongoing share buyback programmes including that announced with the 2023 H1 results.
Timetable and Regulatory
Completion is subject to customary regulatory approvals and conditions with a targeted completion date in the first half of 2024. The Agreement includes a termination fee of US$100 million payable by BAE Systems, Inc. to Ball Aerospace’s parent company in the event the transaction is terminated because certain required regulatory conditions are not met within the agreed timeframe.
Listing Rules Disclosures
The proposed acquisition constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority’s Listing Rules. During the full year ended 31 December 2022, the Ball Aerospace business generated revenue of $1,977m and EBIT of $170m, and the business had gross assets of $1,152m.
Analyst and investor presentation
A presentation, for analysts and investors, will be available via WebEx at 9:00 am UK time today (17 August 2023). Details can be found on investors.baesystems.com, together with presentation slides and this announcement. A recording of the presentation will be available for replay later in the day.
Cautionary Statement
All statements other than statements of historical fact included in this announcement including, without limitation, those regarding the financial condition, results, operations and businesses of BAE Systems and its strategy, plans and objectives and the markets and economies in which it operates, are forward-looking statements. Such forward-looking statements which reflect management’s assumptions made on the basis of information available to it at this time, involve known and unknown risks, uncertainties and other important factors which could cause the actual results, performance or achievements of BAE Systems or the markets and economies in which BAE Systems operates to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. BAE Systems plc and its directors accept no liability to third parties in respect of any such forward-looking statements.
Media Contact:
Martin Cooper
Investor Relations Director
+44 (0)1252 383040
Kristina Anderson
Director, Media Relations
Corporate Communications
+44 (0) 7540 628673
SOURCE: BAE Systems
MORE ON BAE SYSTEMS, ETC.:
- The Road to Sustainable Electric Motors for EVs: IDTechEx Analyzes Key Factors
- Infrared Technology Breakthroughs Paving the Way for a US$500 Million Market, Says IDTechEx Report
- MegaFair Revolutionizes the iGaming Industry with Skill-Based Games
- European Commission Evaluates Poland’s Media Adherence to the Right to be Forgotten
- Global Race for Autonomous Trucks: Europe a Critical Region Transport Transformation
- Digi Communications N.V. confirms the full redemption of €450,000,000 Senior Secured Notes
- AT&T Obtiene Sentencia Contra Grupo Salinas Telecom, Propiedad de Ricardo Salinas, Sus Abogados se Retiran Mientras Él Mueve Activos Fuera de EE.UU. para Evitar Pagar la Sentencia
- Global Outlook for the Challenging Autonomous Bus and Roboshuttle Markets
- Evolving Brain-Computer Interface Market More Than Just Elon Musk’s Neuralink, Reports IDTechEx
- Latin Trails Wraps Up a Successful 3rd Quarter with Prestigious LATA Sustainability Award and Expands Conservation Initiatives ↗️
- Astor Asset Management 3 Ltd leitet Untersuchung für potenzielle Sammelklage gegen Ricardo Benjamín Salinas Pliego von Grupo ELEKTRA wegen Marktmanipulation und Wertpapierbetrug ein
- Digi Communications N.V. announces that the Company’s Romanian subsidiary exercised its right to redeem the Senior Secured Notes due in 2025 in principal amount of €450,000,000
- Astor Asset Management 3 Ltd Inicia Investigación de Demanda Colectiva Contra Ricardo Benjamín Salinas Pliego de Grupo ELEKTRA por Manipulación de Acciones y Fraude en Valores
- Astor Asset Management 3 Ltd Initiating Class Action Lawsuit Inquiry Against Ricardo Benjamín Salinas Pliego of Grupo ELEKTRA for Stock Manipulation & Securities Fraud
- Digi Communications N.V. announced that its Spanish subsidiary, Digi Spain Telecom S.L.U., has completed the first stage of selling a Fibre-to-the-Home (FTTH) network in 12 Spanish provinces
- Natural Cotton Color lancia la collezione "Calunga" a Milano
- Astor Asset Management 3 Ltd: Salinas Pliego Incumple Préstamo de $110 Millones USD y Viola Regulaciones Mexicanas
- Astor Asset Management 3 Ltd: Salinas Pliego Verstößt gegen Darlehensvertrag über 110 Mio. USD und Mexikanische Wertpapiergesetze
- ChargeEuropa zamyka rundę finansowania, której przewodził fundusz Shift4Good tym samym dokonując historycznej francuskiej inwestycji w polski sektor elektromobilności
- Strengthening EU Protections: Robert Szustkowski calls for safeguarding EU citizens’ rights to dignity
- Digi Communications NV announces the release of H1 2024 Financial Results
- Digi Communications N.V. announces that conditional stock options were granted to a director of the Company’s Romanian Subsidiary
- Digi Communications N.V. announces Investors Call for the presentation of the H1 2024 Financial Results
- Digi Communications N.V. announces the conclusion of a share purchase agreement by its subsidiary in Portugal
- Digi Communications N.V. Announces Rating Assigned by Fitch Ratings to Digi Communications N.V.
- Digi Communications N.V. announces significant agreements concluded by the Company’s subsidiaries in Spain
- SGW Global Appoints Telcomdis as the Official European Distributor for Motorola Nursery and Motorola Sound Products
- Digi Communications N.V. announces the availability of the instruction regarding the payment of share dividend for the 2023 financial year
- Digi Communications N.V. announces the exercise of conditional share options by the executive directors of the Company, for the year 2023, as approved by the Company’s Ordinary General Shareholders’ Meetings from 18th May 2021 and 28th December 2022
- Digi Communications N.V. announces the granting of conditional stock options to Executive Directors of the Company based on the general shareholders’ meeting approval from 25 June 2024
- Digi Communications N.V. announces the OGMS resolutions and the availability of the approved 2023 Annual Report
- Czech Composer Tatiana Mikova Presents Her String Quartet ‘In Modo Lidico’ at Carnegie Hall
- SWIFTT: A Copernicus-based forest management tool to map, mitigate, and prevent the main threats to EU forests
- WickedBet Unveils Exciting Euro 2024 Promotion with Boosted Odds
- Museum of Unrest: a new space for activism, art and design
- Digi Communications N.V. announces the conclusion of a Senior Facility Agreement by companies within Digi Group
- Digi Communications N.V. announces the agreements concluded by Digi Romania (formerly named RCS & RDS S.A.), the Romanian subsidiary of the Company
- Green Light for Henri Hotel, Restaurants and Shops in the “Alter Fischereihafen” (Old Fishing Port) in Cuxhaven, opening Summer 2026
- Digi Communications N.V. reports consolidated revenues and other income of EUR 447 million, adjusted EBITDA (excluding IFRS 16) of EUR 140 million for Q1 2024
- Digi Communications announces the conclusion of Facilities Agreements by companies from Digi Group
- Digi Communications N.V. Announces the convocation of the Company’s general shareholders meeting for 25 June 2024 for the approval of, among others, the 2023 Annual Report
- Digi Communications NV announces Investors Call for the presentation of the Q1 2024 Financial Results
- Digi Communications intends to propose to shareholders the distribution of dividends for the fiscal year 2023 at the upcoming General Meeting of Shareholders, which shall take place in June 2024
- Digi Communications N.V. announces the availability of the Romanian version of the 2023 Annual Report
- Digi Communications N.V. announces the availability of the 2023 Annual Report
- International Airlines Group adopts Airline Economics by Skailark ↗️
- BevZero Spain Enhances Sustainability Efforts with Installation of Solar Panels at Production Facility
- Digi Communications N.V. announces share transaction made by an Executive Director of the Company with class B shares
- BevZero South Africa Achieves FSSC 22000 Food Safety Certification
- Digi Communications N.V.: Digi Spain Enters Agreement to Sell FTTH Network to International Investors for Up to EUR 750 Million
- Patients as Partners® Europe Announces the Launch of 8th Annual Meeting with 2024 Keynotes and Topics
- driveMybox continues its international expansion: Hungary as a new strategic location
- Monesave introduces Socialised budgeting: Meet the app quietly revolutionising how users budget
- Digi Communications NV announces the release of the 2023 Preliminary Financial Results
- Digi Communications NV announces Investors Call for the presentation of the 2023 Preliminary Financial Results
- Lensa, един от най-ценените търговци на оптика в Румъния, пристига в България. Първият шоурум е открит в София
- Criando o futuro: desenvolvimento da AENO no mercado de consumo em Portugal
- Digi Communications N.V. Announces the release of the Financial Calendar for 2024
- Customer Data Platform Industry Attracts New Participants: CDP Institute Report
- eCarsTrade annonce Dirk Van Roost au poste de Directeur Administratif et Financier: une décision stratégique pour la croissance à venir
- BevZero Announces Strategic Partnership with TOMSA Desil to Distribute equipment for sustainability in the wine industry, as well as the development of Next-Gen Dealcoholization technology
- Digi Communications N.V. announces share transaction made by a Non-Executive Director of the Company with class B shares
- Digi Spain Telecom, the subsidiary of Digi Communications NV in Spain, has concluded a spectrum transfer agreement for the purchase of spectrum licenses
- Эксперт по торговле акциями Сергей Левин запускает онлайн-мастер-класс по торговле сырьевыми товарами и хеджированию
- Digi Communications N.V. announces the conclusion by Company’s Portuguese subsidiary of a framework agreement for spectrum usage rights
- North Texas Couple Completes Dream Purchase of Ouray’s Iconic Beaumont Hotel
- Предприниматель и филантроп Михаил Пелег подчеркнул важность саммита ООН по Целям устойчивого развития 2023 года в Нью-Йорке
- Digi Communications NV announces the release of the Q3 2023 Financial Results
- IQ Biozoom Innovates Non-Invasive Self-Testing, Empowering People to Self-Monitor with Laboratory Precision at Home
- BevZero Introduces Energy Saving Tank Insulation System to Europe under name “BevClad”
- Motorvision Group reduces localization costs using AI dubbing thanks to partnering with Dubformer
- Digi Communications NV Announces Investors Call for the Q3 2023 Financial Results
- Jifiti Granted Electronic Money Institution (EMI) License in Europe
- Предприниматель Михаил Пелег выступил в защиту образования и грамотности на мероприятии ЮНЕСКО, посвящённом Международному дню грамотности
- VRG Components Welcomes New Austrian Independent Agent
- Digi Communications N.V. announces that Digi Spain Telecom S.L.U., its subsidiary in Spain, and abrdn plc have completed the first investment within the transaction having as subject matter the financing of the roll out of a Fibre-to-the-Home (“FTTH”) network in Andalusia, Spain
- Продюсер Михаил Пелег, как сообщается, работает над новым сериалом с участием крупной голливудской актрисы
- Double digit growth in global hospitality industry for Q4 2023
- ITC Deploys Traffic Management Solution in Peachtree Corners, Launches into United States Market
- Cyviz onthult nieuwe TEMPEST dynamische controlekamer in Benelux, Nederland
- EU-Funded CommuniCity Launches its Second Open Call
- Astrologia pode dar pistas sobre a separação de Sophie Turner e Joe Jonas
- La astrología puede señalar las razones de la separación de Sophie Turner y Joe Jonas
- Empowering Europe against infectious diseases: innovative framework to tackle climate-driven health risks
- Montachem International Enters Compostable Materials Market with Seaweed Resins Company Loliware
- Digi Communications N.V. announces that its Belgian affiliated companies are moving ahead with their operations
- Digi Communications N.V. announces the exercise of conditional share options by an executive director of the Company, for the year 2022, as approved by the Company’s Ordinary General Shareholders’ Meeting from 18 May 2021
- Digi Communications N.V. announces the availability of the instruction regarding the payment of share dividend for the 2022 financial year
- Digi Communications N.V. announces the availability of the 2022 Annual Report
- Digi Communications N.V. announces the general shareholders’ meeting resolutions from 18 August 2023 approving amongst others, the 2022 Annual Accounts
- Русские эмигранты усиливают призывы «Я хочу, чтобы вы жили» через искусство
- BevZero Introduces State-of-the-Art Mobile Flash Pasteurization Unit to Enhance Non-Alcoholic Beverage Stability at South Africa Facility
- Russian Emigrés Amplify Pleas of “I Want You to Live” through Art
- Digi Communications NV announces the release of H1 2023 Financial Results
- Digi Communications NV Announces Investors Call for the H1 2023 Financial Results
- Digi Communications N.V. announces the convocation of the Company’s general shareholders meeting for 18 August 2023 for the approval of, among others, the 2022 Annual Report
- “Art Is Our Weapon”: Artists in Exile Deploy Their Talents in Support of Peace, Justice for Ukraine
- Digi Communications N.V. announces the availability of the 2022 Annual Financial Report
- “AmsEindShuttle” nuevo servicio de transporte que conecta el aeropuerto de Eindhoven y Ámsterdam
- Un nuovo servizio navetta “AmsEindShuttle” collega l’aeroporto di Eindhoven ad Amsterdam
- Digi Communications N.V. announces the conclusion of an amendment agreement to the Facility Agreement dated 26 July 2021, by the Company’s Spanish subsidiary
- Digi Communications N.V. announces an amendment of the Company’s 2023 financial calendar
- iGulu F1: Brewing Evolution Unleashed
- Почему интерактивная «Карта мира» собрала ключевые антивоенные сообщества россиян по всему миру и становится для них важнейшим инструментом
- Hajj Minister meets EU ambassadors to Saudi Arabia
- Online Organizing Platform “Map of Peace” Emerges as Key Tool for Diaspora Activists
- Digi Communications N.V. announces that conditional stock options were granted to executive directors of the Company based on the general shareholders’ meeting approval from 18 May 2021
- Digi Communications N.V. announces the release of the Q1 2023 financial results
- AMBROSIA – A MULTIPLEXED PLASMO-PHOTONIC BIOSENSING PLATFORM FOR RAPID AND INTELLIGENT SEPSIS DIAGNOSIS AT THE POINT-OF-CARE
- Digi Communications NV announces Investors Call for the Q1 2023 Financial Results presentation
- Digi Communications N.V. announces the amendment of the Company’s 2023 financial calendar
- Digi Communications N.V. announces the conclusion of two Facilities Agreements by the Company’s Romanian subsidiary
- Digi Communications N.V. announces the conclusion of a Senior Facility Agreement by the Company’s Romanian subsidiary
- Patients as Partners Europe Returns to London and Announces Agenda Highlights
- GRETE PROJECT RESULTS PRESENTED TO TEXTILE INDUSTRY STAKEHOLDERS AT INTERNATIONAL CELLULOSE FIBRES CONFERENCE
- Digi Communications N.V. announces Digi Spain Telecom S.L.U., its subsidiary in Spain, entered into an investment agreement with abrdn to finance the roll out of a Fibre-to-the-Home (FTTH) network in Andalusia, Spain
- XSpline SPA / University of Linz (Austria): the first patient has been enrolled in the international multicenter clinical study for the Cardiac Resynchronization Therapy DeliveRy guided by non-Invasive electrical and VEnous anatomy assessment (CRT-DRIVE)
- Franklin Junction Expands Host Kitchen® Network To Europe with Digital Food Hall Pioneer Casper
- Unihertz a dévoilé un nouveau smartphone distinctif, Luna, au MWC 2023 de Barcelone
- Unihertz Brachte ein Neues, Markantes Smartphone, Luna, auf dem MWC 2023 in Barcelona
- Editor's pick archive....