Italian defense conglomerate Leonardo SpA is solidifying its global footing after the announced merger of its Leonardo DRS Inc subsidiary, a U.S.-based defense technology provider, and Israel-based RADA Electronic Industries Ltd, provider of advanced software-defined military tactical radars. The move makes Leonardo DRS a new global leader in advanced sensing and force protection, listed on both the NASDAQ in the U.S. and TASE in Israel.
The numbers make perfect sense. With the all-stock transaction, which is expected in the fourth quarter of 2022, RADA will become a wholly-owned subsidiary of Leonardo DRS.
- As the new entity created by the merger, Leonardo DRS is expected to be listed on NASDAQ and TASE under the symbol “DRS.”
- Leonardo DRS will acquire 100% of the share capital in RADA in exchange for approximately 19.5% equity ownership to RADA shareholders in the new entity.
- Combined, Leonardo DRS and RADA had revenues of $2.7 billion in 2021.
A core strategic move. Leonardo’s CEO Alessandro Profumo underscored the strategic and business synergy between the two companies with growing potential “in today’s and tomorrow’s defense market,” including listing Leonardo DRS “in the current context of volatile markets.”
- The move is aligned to many of the fastest growing segments of the U.S. and international defense markets, including the U.S. Department of Defense budget and a domestic presence in Israel.
- New global opportunities will open up for Leonardo DRS through the worldwide presence of its parent company Leonardo.
- RADA’s advanced tactical radars improve Leonardo DRS’s position as an air defense, counter-UAS and vehicle protection integrator.
And Italy applauds. Italian minister of defense Lorenzo Guerini said the agreement “confirms the international leadership of our country’s defense and security sector” and represents a “positive” sign and “an important opportunity for Italy.”