MELBOURNE, Fla. - L3Harris Technologies (NYSE:LHX), a major player in the defense sector, announced it has entered into a definitive agreement to divest its antenna and related businesses to an affiliate of Kanders & Company, Inc. for $200 million. The transaction, which includes $175 million in cash and a $25 million seller note, is poised to be finalized within this quarter, pending customary closing conditions and regulatory approvals.
The deal is part of L3Harris's strategy to reshape its portfolio by offloading non-core assets. The proceeds from the sale are slated to be used in accordance with the company's capital allocation strategy. The businesses being sold specialize in a range of airborne and ground-based antennas and testing equipment. They fall under the Space & Airborne Systems segment of L3Harris and employ roughly 375 individuals.
Kanders & Company, Inc., a single-family office based in Palm Beach, Florida, and led by Warren B. Kanders, is known for its active strategic partnerships that focus on operational enhancement and long-term growth across various sectors. Kanders brings over three decades of investment experience in both public and private companies to the table.
L3Harris Technologies, self-described as the "Trusted Disruptor" in the defense industry, emphasizes its commitment to addressing its customers' mission-critical needs by providing comprehensive technology solutions that connect multiple domains including space, air, land, sea, and cyber, all in the interest of national security. The company boasts a workforce of 50,000 employees.
While the press release contains forward-looking statements regarding the expected performance and economic conditions post-transaction, L3Harris has cautioned investors that such statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
These factors include potential impacts on relationships due to the announcement or consummation of the transaction, unforeseen costs, legal proceedings, and the risk of not obtaining necessary regulatory approvals or meeting other closing conditions in a timely manner.
The information for this article is based on a press release statement from L3Harris Technologies.
InvestingPro Insights
As L3Harris Technologies (NYSE:LHX) navigates the divestiture of its antenna business, the company's financial health and market performance remain key areas of interest for investors. According to InvestingPro data, L3Harris holds a robust market capitalization of $39.84 billion, reflecting its significant presence in the Aerospace & Defense industry. The company's P/E ratio stands at 32.2, which suggests a premium valuation that investors are willing to pay for its earnings, potentially due to its status as a "Trusted Disruptor" in the defense sector.
InvestingPro Tips indicate that L3Harris has a history of consistent dividend growth, having raised its dividend for 22 consecutive years and maintained dividend payments for an impressive 54 consecutive years. This track record of shareholder returns aligns with the company's capital allocation strategy mentioned in the context of the recent divestiture. Additionally, analysts expect L3Harris to be profitable this year, which is supported by the company's revenue growth of 13.81% over the last twelve months as of Q1 2023.
With the transaction set to be finalized this quarter, investors may also note that L3Harris has experienced a significant price uptick of 31.46% over the last six months. This could be an indicator of strong market confidence in the company's strategic moves and overall business health. For those seeking deeper insights and additional metrics, there are over 10 InvestingPro Tips available, which can be accessed to further inform investment decisions. Moreover, users can take advantage of a special offer using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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