RADA Agrees To All-Stock Merger With Leonardo DRS

RADA Electronic Industries Ltd.RADA, an Israel-based provider of small-form tactical radars, and Leonardo DRS Inc have agreed to merge and become a combined public company.
U.S.-based mid-tier defense technology provider Leonardo DRS is a wholly-owned subsidiary of Leonardo S.p.A. FINMY.
Leonardo DRS will acquire 100% of the share capital in RADA in exchange for ~19.5% equity ownership in the combined company to RADA shareholders.
The combined company will maintain the name Leonardo DRS and is anticipated to trade on NASDAQ and TASE under the symbol "DRS."
RADA will become a wholly-owned subsidiary of Leonardo DRS.
RADA expects the transaction to be accretive to earnings per share in year one.
The 19.5% ownership in the combined company provided to RADA shareholders was designed to provide a premium of over 20% (based on RADA 30-day VWAP as of June 17, 2022, of $11.76).
The combined company had revenue of $2.7 billion and $305 million of Adjusted EBITDA in FY21.
The combined company targets a low teen Adjusted EBITDA CAGR through FY23 from an FY21 base of $305 million.
Price Action: RADA shares are trading lower by 3.35% at $11.25 and FINMY higher by 10.93% at $5.38 on the last check Tuesday.