L3Harris announces an acquisition: ‘huge win for the warfighter’

L3Harris Technologies Inc (NYSE: LHX) is buying “Link 16” from Viasat Inc (NASDAQ: VSAT) for $1.96 billion to capitalise on increased U.S. spending on “defense”.

CEO Kubasik’s remarks on CNBC

TDL – the Tactical Data Links business had roughly $400 million in revenue last year. Discussing the acquisition on CNBC’s “Squawk on the Street”, Chris Kubasik – the Chief Executive of L3Harris Technologies said:

Shares of the defense company that has secured about $4.0 billion worth of government contracts in recent months have gained more than 7.0% in two days.

L3Harris plans on funding this deal with debt financing, as per the press release.

Viasat to lower debt and increase liquidity

The definitive agreement is subject to customary closing conditions, including regulatory clearance. But CEO Kubasik is convinced the latter will not be an issue.

The deal, Viasat expects, will result in $1.80 billion of cash proceeds (post taxes, fees, and other expenses) that it plans on using to minimise debt and boost liquidity.

Shares of the communications company that reported a narrower-than-expected loss for its fiscal Q1 last month are up more than 30% this week (so far).