Boeing To Buy California Electronics Company
SEATTLE (AP) _ The Boeing Co. has reached a $275 million agreement to acquire ARGOSystems Inc. of Sunnyvale, Calif., a producer of electronic systems for the military, the two companies announced today.
Boeing intends to acquire for cash all outstanding shares of ARGOSystems at $37 per share, the companies said in a news release. The total price of about $275 million, includes outstanding stock options.
ARGOSystems stock, which is traded over-the-counter, closed Friday at $24.75 a share.
The boards of both companies have approved the agreement.
Boeing has been granted an option to buy 1.24 million ARGOSystems shares at $37 each, representing 18.5 percent of outstanding shares of commons stock. In addition, ARGOSystems Chairman and Chief Executive Officer Bill May and three other principal officiers in the company have granted Boeing an option to buy their shares, representing about 8.9 percent of the outstanding common stock.
″ARGOSystems is a clear leader in its field. This association will expand our overall activities and significantly enhance our ability to compete in the defense electronics arena,″ said Frank Shrontz, Boeing president and chief exectutive officer.
ARGOSystems will operate as a wholly ownded subsidiary of Boeing.
AGROSystems, which employs about 1,200 people, makes communications reconnaissance equipment to acquire, process and analyze military communications signals, and electronic warfare equipment to intercept, analyze and jam radar signals. It also studies and does system engineering in signal processing.
In related fields, Boeing Electronics Co. produces military and commercial electronic gear and does all the electronics design and manufacturing work for Boeing products.
Boeing Aerospace Co. makes Airborne Warning and Control System surveillance aircraft and Navy E-6A airborne communications planes, while Boeing Military Airplane Co. has developed the offensive avionics system for the Air Force’s B1-B bomber.
A Boeing subsidiary, TBC Holdings Corp., will begin a tender offer for all ARGOSystems common stock. Following purchase of the shares under the tender offer, ARGOSystems and TBC Holdings will be merged, subject to shareholder approval, so that all shareholders of ARGOSystems will receive $37 per share and Boeing will own 100 percent of ARGOSystems’ outstanding shares.
ARGOSystems had revenues of $70.9 million for the nine months ending March 31 and company officials expect revenue of about $100 million for the fiscal year ending June 30. The company currently has a backlog of more than $180 million.