Leonardo announced the completion of the all-stock merger between its US subsidiary Leonardo DRS, Inc. (“Leonardo DRS”) and RADA Electronic Industries Ltd. (“RADA”), together also becoming a combined publicly listed company (the “Combined Company”).
As previously disclosed, Leonardo will retain an 80.5% ownership in the Combined Company through its US subsidiary Leonardo US Holding, with RADA existing shareholders owning the remaining 19.5%. Leonardo DRS’ stock has been listed on the NASDAQ and Tel Aviv Stock Exchange (“TASE”) under the symbol “DRS” effective at the opening of NASDAQ trading on November 29, 2022 and TASE trading on November 30, 2022.
The combination is an excellent fit strategically, commercially and financially for Leonardo, allowing the Group to achieve a unique position in the land radar segment thanks to the synergy from its product portfolio together with that of RADA, Hensoldt and GEM. The transaction will also give Leonardo a stable domestic presence in the Israeli industrial context, supporting the further development of Leonardo's international markets, while allowing RADA to access opportunities in European and export markets and programs, leveraging Leonardo’s global presence.
The transaction will also allow the opportunity to realize the benefits deriving from the listing of Leonardo DRS.
Alessandro Profumo, Leonardo CEO, stated: “This is the finalization of the process of combining Leonardo DRS and RADA, an important strategic move by Leonardo in the rapidly growing force protection market, which is at the core of today’s and tomorrow’s defense market. There is an excellent fit between our US subsidiary Leonardo DRS, RADA and Leonardo Group that will provide growth, further margin expansion and opportunities in the Group. With this transaction we also seizing the opportunity of listing Leonardo DRS in the current context of volatile markets, thus delivering on what we promised.”
In recent years, Leonardo has successfully reinforced Leonardo DRS’s competitive positioning, delivering on promises, focusing it on its core business, through the previously announced dispositions of GES and AAC, and now making a significant strategic step forward, with the combination with RADA, adding a strong business in active defense solutions.
“We look forward to bringing Leonardo DRS’s mid-tier strength to the public markets with the addition of RADA’s leading tactical radar capabilities,” said William J. Lynn III, Chairman & CEO of Leonardo DRS.
“Leonardo DRS’s broad exposure to fast growing segments in the defense market and market leading positions in advanced sensing, force protection, network computing and electric power & propulsion make us a unique defense contractor with a compelling growth outlook, margin expansion capabilities and a largely unlevered balance sheet,” he added.
Leonardo DRS, Inc., headquartered in Arlington VA, develops and manufactures advanced defense products for the U.S. military, intelligence agencies and allies around the world. The company’s broad technology portfolio focuses on advanced sensing, network computing, force protection, and electric power and propulsion, as well as a range of key defense priorities. Its innovative people are leading the way in developing disruptive technologies for autonomous, dynamic, interconnected, and multi-domain capabilities to defend against new and emerging threats.
Leonardo, a global high-technology company, is among the top world players in Aerospace, Defense and Security and Italy’s main industrial company. Organized into five business divisions, Leonardo has a significant industrial presence in Italy, the United Kingdom, Poland and the USA, where it also operates through subsidiaries that include Leonardo DRS (defense electronics), and joint ventures and partnerships: ATR, MBDA, Telespazio, Thales Alenia Space and Avio.
Leonardo competes in the most important international markets by leveraging its areas of technological and product leadership (Helicopters, Aircraft, Aerostructures, Electronics, Cyber & Security Solutions and Space).
Listed on the Milan Stock Exchange (LDO), in 2021 Leonardo recorded consolidated revenues of €14.1 billion and invested €1.8 billion in Research and Development.