Applied Signal Technology, Inc., a market leader in advanced intelligence, surveillance, and reconnaissance (ISR) solutions, today announced that it has entered into a definitive agreement to be acquired by Raytheon Company in an all cash tender offer for $38.00 per share. This price represents a premium of 8.5% to APSG's closing price of $35.02 on December 17, 2010 and a premium of 37.0% to APSG's closing price of $27.73 on October 21, 2010, the date prior to which the Company disclosed its intention to explore strategic alternatives to enhance shareholder value.
William B. Van Vleet, Chief Executive Officer of Applied Signal Technology, Inc. commented, "We believe that the sale of Applied Signal to Raytheon clearly creates excellent value for our shareholders as well as for our customers in the defense and intelligence market. Our expertise and history of innovation across a range of strategic and tactical ISR products and services, including significant scale in the fast-growing network intelligence space, and Raytheon's technology portfolio, highly developed infrastructure and broad operating and development capabilities will create strong new capabilities for our customers."
"Applied Signal brings world class technologies and talent that complement Raytheon's strong intelligence, surveillance and reconnaissance solutions," said William H. Swanson, Chairman and Chief Executive Officer, Raytheon Company. "This combination of strengths, along with our complementary cultures of innovation, will provide capabilities to address our customers' current and future challenges."
The selection of Raytheon Company as the acquirer was the result of a comprehensive evaluative process conducted by Applied Signal Technology, Inc.'s board of directors, during which the Company received and evaluated interest from multiple parties as well as explored other potential courses of action to create value for shareholders. The definitive agreement was unanimously approved by the boards of directors of both companies. Applied Signal Technology, Inc.'s board intends to recommend that the Company's shareholders tender their shares in the offer. Following the transaction, Applied Signal Technology, Inc.'s operations will become part of Raytheon's Space and Airborne Systems business.
The transaction is expected to close in the first quarter of calendar 2011. Under the terms of the merger agreement, the transaction is conditioned upon, among other things, satisfaction of the minimum tender condition of 76.3 percent of the Company's common stock, the expiration of the applicable waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. In the event that the minimum tender condition is not met, and in certain other circumstances, the parties have agreed to complete the transaction through a one-step merger after receipt of shareholder approval.