L-3 to acquire Kollmorgen Electro-Optical

Dec. 14, 2011
New York, NY--L-3 Communications (NYSE: LLL) has entered into an agreement to acquire the Kollmorgen Electro-Optical (KEO) unit of Danaher Corporation (Northampton, MA) for $210 million in cash.

New York, NY--L-3 Communications (NYSE: LLL) has entered into an agreement to acquire the Kollmorgen Electro-Optical (KEO) unit of Danaher Corporation (Northampton, MA) for $210 million in cash. KEO develops and manufactures specialized equipment, including submarine photonics systems and periscopes, ship fire control systems, visual landing aids, and ground electro-optical and sensor-cueing systems. The company's products are used by the U.S. military, prime contractors, and allied nations.

Anticipated for completion in the first quarter of 2012, the acquisition is subject to customary closing conditions and regulatory approvals and will be structured as an asset purchase for income tax purposes. For the year ending December 31, 2012, KEO is expected to generate sales in the range of approximately $160 million to $170 million, and estimated earnings before interest, taxes, depreciation, and amortization before giving effect to the expected synergies, transaction costs, and purchase accounting adjustments (EBITDA) in the range of $26–30 million. Upon closing, the acquisition is expected to be immediately accretive to L-3’s results of operations.

Pending completion of the transaction, KEO will become part of L-3’s Integrated Sensor Systems organization. The Integrated Sensor Systems Sector currently includes L-3’s existing electro-optical/infrared (EO/IR) businesses addressing the air, ground, and maritime markets and is reported in L-3’s Electronic Systems segment.

Wes Motooka, president of L-3’s Integrated Sensor Systems Sector, notes that KEO’s technologies provide situational awareness and will enhance current L-3 products.

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