[Via Satellite 02-06-2015] Harris is purchasing Exelis for $4.75 billion in an acquisition expected to close by June 2015. Both boards of directors unanimously approved the acquisition, and Harris has secured $3.4 billion from Morgan Stanley Senior Funding for fully committed bridge financing. The company anticipates permanent financing in the form of term loans and unsecured bonds prior to closing.
According to Harris, the pre-tax cost synergies with Exelis range from $100 million to as high as $120 million. The company anticipates the purchase will be slightly accretive in the first full year, evolving into a significant contributor in the years following. Harris expects to achieve annual run-rate by year three.
“Our 2014 was another strong year, and we expect to report revenue of approximately $3.25 billion and adjusted operating margin between 12.4 and 12.5 percent, which is in line with our previous guidance,” said David F. Melcher, president and CEO of Exelis.
Exelis ended 2014 with $2.8 billion in its backlog.