Raytheon to acquire Applied Signal Technology

WALTHAM, Mass., 25 Dec. 2010. Raytheon Co. (NYSE: RTN) announced that it has signed a definitive acquisition agreement with Applied Signal Technology, Inc. (Nasdaq: APSG). The acquisition strengthens both companies' intelligence, surveillance, and reconnaissance (ISR) offerings by combining Raytheon's radar and sensor products with Applied Signal's communications and signals technologies.

Posted by John McHale

WALTHAM, Mass., 25 Dec. 2010. Raytheon Co. (NYSE: RTN) announced that it has signed a definitive acquisition agreement with Applied Signal Technology, Inc. (Nasdaq: APSG). The acquisition strengthens both companies' intelligence, surveillance, and reconnaissance (ISR) offerings by combining Raytheon's radar and sensor products with Applied Signal's communications and signals technologies.

Nearly 90 percent of Applied Signal's sales are to classified users. The company's portfolio includes secure broadband network communications; cyber intelligence systems, software and analytics to address sophisticated cyberspace threats; electronic warfare solutions; and other advanced capabilities that enable customers to detect, evaluate and respond to potential threats. These systems are deployed on a range of platforms worldwide.

"Our history of innovation across a range of strategic and tactical ISR products and services, including significant scale in the fast-growing network intelligence space, together with Raytheon's technology portfolio and development expertise will create strong new capabilities for customers," says William B. Van Vleet, chief executive officer, Applied Signal Technology, Inc. Following completion of the transaction, Applied Signal will be integrated into Raytheon's Space and Airborne Systems (SAS) business. Applied Signal's capabilities offer opportunities for growth at SAS and across the Raytheon enterprise.

"Applied Signal aligns with our strategy of expanding participation in our customers' principal areas of need, particularly ISR systems," says Rick Yuse, president, SAS. "Joining Raytheon's radar, electro-optical/infrared sensors, and communications technologies with Applied Signal's SIGINT/COMINT systems will enhance our ability to deliver a full spectrum of integrated sensor solutions."

Under the terms of the agreement, Raytheon will commence a tender offer to purchase all of the outstanding shares of Applied Signal Technology, Inc. common stock at a price of $38.00 per share in cash for a purchase price of approximately $490 million, net of cash acquired. Pending the successful completion of the tender offer, the transaction is expected to close in the first quarter of 2011 subject to customary closing conditions and regulatory approvals. The agreement has been approved by the boards of directors of both companies.

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