L3Harris announces an acquisition: ‘huge win for the warfighter’
- L3Harris Technologies is buying “Link 16” from Viasat Inc for $1.96 billion.
- CEO Chris Kubasik discussed the acquisition on CNBC Squawk on the Street.
- Viasat shares are up more than 30% in two days; L3Harris about 7.0%.
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:
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It’s a huge win for the warfighter. Our employees are excited, and shareholders are reacting positively. Our customers want to be able to connect satellites to aeroplanes, ships, solider on the edge. This technology enables L3Harris to do that.
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.
This is creating more competition which is what the Department of Defense needs. Our ability to make acquisitions will allow us to be a solid 6th prime, thereby competing with the big five; double or sometimes triple our size.
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).