SAN DIEGO, 24 Feb. 2008. SYS Technologies Inc., a provider of information connectivity solutions that enable situational awareness and real-time collaboration, has entered into a definitive merger agreement with Kratos Defense & Security Solutions Inc., a national defense and security solutions provider, in an all-stock transaction. Under the terms of the agreement, SYS Technologies will become a wholly owned subsidiary of Kratos.

The annualized revenue run rate of the combined company is expected to be nearly $400 million by the end of 2008.

The combined company will provide the Department of Defense, Department of Homeland Security, and other government customers with an expanded portfolio of command, control, communications, computing, combat systems, intelligence, surveillance, and reconnaissance (C5ISR) services and solutions.

The combined company will operate under the Kratos name.

The merger is said to open up new opportunities for both companies, including:

Expanded customer footprint – The combined company will have a sizeable customer presence with the Department of Defense, SPAWAR in San Diego, NAVSEA in the Oxnard Plain, NASA, DISA, and with several other customers in the Washington, D.C. and Northern Virginia areas;

Enhanced past performance qualifications – The cumulative experience and differentiated expertise of the combined company in the areas of C5ISR, along with its sizable employee base with government security clearances, will allow it to qualify for and bid on larger projects in the prime contractor role;

Strategic new geographies – Kratos is focused on key BRAC locations such as Huntsville, Ala.; San Diego; Keyport, Wa., and the Pacific Missile Range Facilities in Hawaii, while SYS has a presence in Northern Virginia, the Pentagon, San Diego, and Colorado Springs.