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Netanya-dependent Israeli protection company RADA Electronic Industries Ltd. (TASE: RADA Nasdaq: RADA), which generates tactical radar systems, is merging with US organization Leonardo DRS Inc. The inventory-based transaction will end result in RADA’s existing shareholders holding 19.5% of the merged corporation. The deal is expected to close in the fourth quarter of this 12 months. RADA will turn into a wholly-owned subsidiary of Leonardo DRS, which will be listed on Nasdaq and on the Tel Aviv Stock Exchange beneath the image DRS. The conditions of the deal represent a 34% quality more than RADA’s closing share rate yesterday, valuing the corporation at $775 million.
RADA employs 255 people in Israel and 80 in the US.
The mixed enterprise is predicted to make EBITDA as a proportion of revenue in the lower double-digits in 2023. The merged business experienced $2.7 billion revenue and $305 million altered EBITDA in 2021. At the stop of the initially quarter of 2022, the put together firm experienced financial debt of close to $197 million.
RADA is a veteran firm that for most of its existence dealt in avionics. Around a 10 years back, it entered a new field, that of advanced software-described army tactical radars. The radars are mounted on army cars and run on the shift. They consequently present ground forces with lively safety, such as versus mortars and assault drones. The company is also even now active in its traditional subject of avionics.
“RADA and Leonardo DRS are powerful and complementary know-how companies, and their near historic romance by means of collaboration on a number of systems, has resulted in a deep cultural fit,” the companies’ announcement explained.
The announcement also said that “Leonardo DRS’s parent business and sole shareholder, Leonardo SpA, is a primary worldwide Aerospace and Defense organization. Leonardo SpA’s market posture will offer access to a reshaped European protection market place as properly as defense markets about the planet, even though also setting up a house industry in Israel.”
RADA CEO Dov Sella explained, “I could not be prouder of the system we have developed during my nearly 20 years with RADA, culminating in this important strategic transaction with Leonardo DRS. The mix of two leading technological innovation-focused defense corporations with diversified publicity to vital US Division of Defense packages and an worldwide existence generates a legitimate earn-earn for RADA and Leonardo DRS shareholders.
“The transaction represents the very first time a key US-based mostly protection enterprise backed by a international defense key has obtained a considerable Israeli defense technology organization. This exclusive transaction will reinforce the Israeli defense industry and established tendencies and route for the long run.”
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“The conflict in Ukraine has underscored the vulnerability of forces to drone assaults and has highlighted the need to have for modern, able power protection units. Not only is this accelerating US purchases of these units, but it is shifting European nations, which are significantly driving in this region, to get a lot more significant drive protection property. The mix of RADA and Leonardo DRS will open up worldwide industry opportunities, specifically in shorter-range air defense, counter-UAS, counter rockets, artillery and mortars and car defense devices,” mentioned William J. Lynn III, CEO of Leonardo DRS.
Evercore is serving as unique economical advisor to RADA and J.P. Morgan Securities LLC is serving as special economic advisor to Leonardo DRS. DLA Piper LLP (US) and S. Friedman & Co. are serving as legal advisors to RADA and Sullivan & Cromwell LLP and Herzog Fox & Neeman are serving as legal advisors to Leonardo DRS.
Released by Globes, Israel business enterprise news – en.globes.co.il – on June 21, 2022.
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