Carlyle Group To Purchase General Dynamics Unit
WASHINGTON (AP) _ The Carlyle Group, a privately-held merchant bank, announced Monday it was buying the San Diego-based Electronics Division of General Dynamics Corp.
Carlyle, which is based in Washington, said the new company, to be named GDE Systems, will remain in San Diego.
The Electronics Division, which employs 2,300 workers, applies digital technology to design, develop and manufacture defense electronics. The division’s 1992 earnings are expected to be $300 million.
The two main components of the deal are the Automatic Test Systems unit, the nation’s largest supplier of automated test systems for the U.S. Air Force, and the Tactical Systems unit that designs and makes products for digital mapping and mission planning for air, sea and ground operations.
However, General Dynamics’s Secure Communications unit, which makes the Army’s SINCGARS radio communications program in Talahassee, Fla., was not included in the purchase agreement.
The sale was the latest in a series of moves by Falls Church, Va.-based General Dynamics to pare down to just four military businesses: tactical military aircraft, nuclear submarines, armored vehicles and space-launch systems.
″This is another step in our program to concentrate upon our four core defense businesses. The sale is totally consistent with the direction that we we said we would be moving in,″ said Alvin A. Spivak, a General Dynamics spokesman.
Recent General Dynamics divestitures have included the sale of Cessna Aircraft Co. to Textron Inc. for $600 million and its computer division. General Dynamics has also sold its missile business to the Hughes Aircraft Co., a unit of General Motors Corp., for at least $450 million in GM stock.
Details of the Electronics Division deal, including the exact purchase price, were not disclosed because of a prior agreement between the two companies, said William E. Conway Jr., a Carlyle managing director. He did say the all-cash deal was for less than $100 million.
Carlyle said it expected to complete the deal by Nov. 30.
Senior mamangement of the division, including Terry A. Strater, the former head of the division, will have a stake in the new company and will continue to operate it, said Conway.