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General Dynamics Buys Axsys Technologies

06/18/2009

General Dynamics Advanced Information Systems, a business unit of General Dynamics (NYSE: GD), has entered into a definitive agreement to acquire Axsys Technologies, Inc., (NASDAQ: AXYS) for $54 per share of Axsys Technologies’ outstanding common stock. The cost of the transaction would be $643 million.

The proposed acquisition, which has been approved by the boards of directors of Axsys Technologies and General Dynamics, would be earnings-neutral in 2009 and accretive to General Dynamics’ earnings thereafter. The transaction is subject to normal regulatory approvals as well as approval by Axsys Technologies’ shareholders, and is expected to close during the third quarter of the year.

Axsys Technologies is a global leader in the design and manufacture of high-performance electro-optical and infrared (EO/IR) sensors and systems and multi-axis stabilized cameras. Its customers include U.S. military and homeland security agencies, systems integrators that support those customers, and commercial customers in high-performance markets such as aerial and perimeter surveillance applications in law enforcement, energy and broadcast and film production. Axsys Technologies’ sophisticated solutions are typically found in applications that demand the finest optical surfaces, highest accuracy and tightest motion-control tolerances, such as weapon systems, long-range surveillance cameras and highly precise imaging telescopes.

“Axsys Technologies delivers innovative, high-value products in a market segment that is strategic for General Dynamics Advanced Information Systems. Adding Axsys Technologies’ capabilities to our existing intelligence, surveillance and reconnaissance expertise will enable us to further strengthen our portfolio of offerings and discriminators in the high-growth tactical ISR market,” said Lou Von Thaer, president of General Dynamics Advanced Information Systems.
“In addition, we look forward to maintaining and strengthening relationships with Axsys Technologies’ existing customers, expanding and diversifying the technical products that General Dynamics is able to offer and pursuing new markets through collaboration among the product experts at each company,” Von Thaer said.

Stephen W. Bershad, chairman of the board and chief executive officer of Axsys Technologies, said, “I am extremely proud of the organization that Axsys Technologies has become. Over the past several years we have successfully executed strategies aimed at making Axsys Technologies a premier supplier of optical solutions for surveillance, reconnaissance and targeting applications, and as part of General Dynamics we will be even better positioned to capitalize on the substantial opportunities in our markets.”

Axsys Technologies employs approximately 1,000 workers. It is based in Rocky Hill, Conn., and has facilities in Alabama, California, Michigan and New Hampshire. The company had a backlog of $162.1 million as of March 28, 2009, and anticipates 2009 sales of $280 million.