Photo above: Maritime radar system developed by RADA
RADA Electronic Industries, and Leonardo DRS, announced that they have entered into a definitive agreement to merge and become a combined public company. Leonardo DRS will acquire 100% of the share capital in RADA in exchange for approximately 19.5% equity ownership to RADA shareholders in the Combined Company, which will maintain the name Leonardo DRS and is anticipated to trade on NASDAQ and TASE under the symbol “DRS.”
Leonardo DRS is owned by the Italian Leonardo SpA. Upon closing of the transaction, which is expected in the fourth quarter of 2022, RADA will become a wholly-owned Israeli subsidiary of Leonardo DRS and operate as a business unit within DRS’ Advanced Sensing segment. RADA’s 2021 revenues totaled $117 million. The combined Company had 2021 revenue of $2.7 billion.
RADA is a global pioneer of mini-tactical radars for active military protection, counter-drone applications, critical infrastructure protection, and border surveillance. It works closely with leading defense integrators such as Rafael, Elbit, Israel Aerospace Industries (IAI), Lockheed Martin, Boeing, Leonardo DRS, Rheinmetall Air Defense and others. Its small footprint and lightweight tactical radars sit at the heart of combat-proven Active Protection Systems (APS), Vehicle Protection Systems (VPS), and Hostile Fire Detection (HFD) applications.
The merger agreement proves that Leonardo re-align its business to address these needs, as it is daily demonstrated in the Russian-Ukrainian war. In fact, the company is undergoing a strategic assessment of its business. Last month it sold its commercial satellite business to SES for $450 million. The company explained the move as part of its “focus on transforming to meet the DoD’s important priorities.”
William Lynn III, CEO of Leonardo DRS, explained the merger with RADA using similar terms: “The conflict in Ukraine has underscored the vulnerability of forces to drone attacks and has highlighted the need for modern, capable force protection systems. The combination of RADA and Leonardo DRS will open international market opportunities, particularly in short-range air defense, counter-UAS, counter rockets, artillery and mortars (C-RAM) and vehicle protection systems.”