Harris Corp. is acquiring Exelis Inc. in a $4.75 billion cash and stock deal expected to close in June. The companies are two of the region’s largest manufacturers.
Under the deal, the Florida-based Harris is to pay $23.75 a share. Upon closing, Harris shareholders will own roughly 85 percent of the combined company and Exelis shareholders will own roughly 15 percent.
Harris stock soared some 9 percent after the announcement Friday morning. Shares (NYSE: HRS) were trading around $76.05, up from Thursday’s close of $69.49.
“Acquiring Exelis is transformational for Harris,” said William Brown, Harris chairman, president and CEO, in a statement. “The combination of the two companies’ highly complementary core franchises creates a competitively stronger company with significantly greater scale”
Harris is the parent of RF Communications in Rochester. Virginia-based Exelis has a local operation at the Rochester Technology Park.
RF Communications ranked 12th on the RBJ 75 list of the region’s largest employers with 2,100 local workers; Exelis ranked 24th with 1,150 workers.
Harris reported fiscal 2014 sales in July of $5.01 billion; Exelis expects to report 2014 revenue of some $3.25 billion at the end of February.
Exelis was formerly part of ITT Corp., but was spun out in 2011; prior to that, the local operation was Eastman Kodak Co’s Remote Sensing Systems Division.
Also Friday, Harris reported its second-quarter financial results.
The company logged income from continuing operations of $140 million, or $1.32 a diluted share, versus income from continuing operations of $137 million, or $1.27 a diluted share.
Sales were $1.21 billion, down from sales of $1.22 billion a year ago.
RF Communications segment revenue was $432 million, compared with $455 million in the prior year. Tactical Communications revenue was $316 million, decreasing 1 percent, and Public Safety revenue was $116 million, decreasing 14 percent.
Segment operating income was $125 million, compared with $142 million in the prior year.
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