Netanya-dependent Israeli defense enterprise RADA Digital Industries Ltd. (TASE: RADA Nasdaq: RADA), which makes tactical radar units, is merging with US firm Leonardo DRS Inc. The inventory-primarily based transaction will consequence in RADA’s current shareholders keeping 19.5% of the merged firm. The offer is envisioned to shut in the fourth quarter of this 12 months. RADA will turn out to be a wholly-owned subsidiary of Leonardo DRS, which will be detailed on Nasdaq and on the Tel Aviv Inventory Trade less than the image DRS. The terms of the offer characterize a 34% top quality about RADA’s closing share value yesterday, valuing the corporation at $775 million.

The merged firm is envisioned to deliver EBITDA as a percentage of profits in the small double-digits in 2023. The merged enterprise had $2.7 billion income and $305 million adjusted EBITDA in 2021. At the end of the to start with quarter of 2022, the blended firm experienced financial debt of around $197 million.

RADA is a veteran organization that for most of its existence dealt in avionics. More than a 10 years ago, it entered a new industry, that of innovative software-outlined armed forces tactical radars. The radars are mounted on armed forces autos and operate on the transfer. They as a result offer ground forces with energetic defense, this kind of as towards mortars and assault drones. The enterprise is also nonetheless active in its common discipline of avionics.

“RADA and Leonardo DRS are sturdy and complementary engineering businesses, and their near historical marriage as a result of collaboration on multiple programs, has resulted in a deep cultural match,” the companies’ announcement reported.

The announcement also said that “Leonardo DRS’s guardian organization and sole shareholder, Leonardo SpA, is a main world wide Aerospace and Protection enterprise. Leonardo SpA’s market position will deliver accessibility to a reshaped European protection current market as nicely as protection markets close to the environment, though also establishing a house market place in Israel.”

RADA CEO Dov Sella stated, “I could not be prouder of the platform we have developed all over my nearly 20 years with RADA, culminating in this significant strategic transaction with Leonardo DRS. The combination of two major engineering-targeted defense companies with diversified exposure to essential US Section of Defense plans and an global presence generates a accurate earn-win for RADA and Leonardo DRS shareholders.

“The transaction represents the to start with time a important US-dependent protection firm backed by a international protection primary has acquired a substantial Israeli defense engineering organization. This special transaction will fortify the Israeli protection market and set tendencies and path for the upcoming.”




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“The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the require for modern-day, capable pressure safety programs. Not only is this accelerating US buys of these methods, but it is shifting European countries, which are considerably powering in this place, to receive additional significant force defense property. The blend of RADA and Leonardo DRS will open international marketplace prospects, significantly in small-array air protection, counter-UAS, counter rockets, artillery and mortars and vehicle safety systems,” explained William J. Lynn III, CEO of Leonardo DRS.

Evercore is serving as exclusive economical advisor to RADA and J.P. Morgan Securities LLC is serving as exclusive money 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 lawful advisors to Leonardo DRS.

Published by Globes, Israel company news – en.globes.co.il – on June 21, 2022.

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