Raytheon Acquires Applied Signal Technology for $490 Million in Cash

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Raytheon Company (NYSE: RTN) announced its plans to acquire Applied Signal Technology, Inc. (Nasdaq: APSG) for about $490 million. Applied Signal technology is a specialist in signals intelligence (SIGINT) communications intelligence and electronic warfare (EW) systems. The agreement has been approved by the boards of directors of both companies. Pending the successful completion of the tender offer, the transaction is expected to close in the first quarter of 2011 subject to customary closing conditions and regulatory approvals. Under the terms of the agreement, Raytheon will commence a tender offer to purchase all of the outstanding shares of Applied Signal Technology, Inc. common stock at a price of $38.00 per share in cash for an aggregate purchase price of approximately $490 million, net of cash acquired.

Raytheon plans to integrate the company into its Space and Airborne Systems (SAS) business. Nearly 90 percent of Applied Signal’s sales are to classified customers. The company’s portfolio includes secure broadband network communications; cyber intelligence systems, software and analytics to address sophisticated cyberspace threats; electronic warfare solutions; and other advanced capabilities that enable customers to detect, evaluate and respond to potential threats. These systems are deployed on a range of strategic platforms worldwide.

“Our history of innovation across a range of strategic and tactical ISR products and services, including significant scale in the fast-growing network intelligence space” explained William B. Van Vleet, Chief Executive Officer, Applied Signal Technology, Inc. “Applied Signal aligns with our strategy of expanding participation in our customers’ principal areas of need, particularly ISR systems,” said Rick Yuse, president, SAS. “Joining Raytheon’s radar, electro-optical/infrared sensors, and communications technologies with Applied Signal’s SIGINT/COMINT systems will enhance our ability to deliver a full spectrum of integrated sensor solutions.”