Henry Bros. Agrees to Sell for Approximately $45 Million to Kratos, Subject to Approvals
Henry Bros. Electronics Inc. (HBE), Fair Lawn, N.J., a
turnkey provider of technology-based integrated electronic security solutions
and ranked as the 18th largest U.S. security integrator on SDM’s Top
Systems Integrators Report, has entered into a definitive agreement with Kratos
Defense & Security Solutions, San Diego, Calif., under which Kratos will
acquire all outstanding shares of HBE common stock for a purchase price of
approximately $45 million in cash, or $7 per HBE share of
common stock.
Eric DeMarco, Kratos’ president and chief executive officer
(CEO), said, “Henry Brothers is clearly one of the premier homeland and
national security solution providers and command-and-control-center design
engineering and operators in the industry today. We see the opportunity
for significant cross selling between the two businesses, including
for Henry Brothers’ proprietary first responder communications products
and solutions. Additionally, we see the opportunity to cross sell into HBE’s
large and established customer base, Kratos’ NeuralStar and DopplerVue
situational awareness, security network management, protection and cyber security
software products.
The transaction is subject to the satisfaction of customary
closing conditions, including approval by the holders of a majority of the
outstanding shares of HBE, and also provides for a 40-day “go shop” period.
Henry and all other directors of HBE, who collectively hold approximately
60 percent of HBE’s shares outstanding, have agreed to vote their shares in
favor of the anticipated merger. Additionally, Henry has committed to purchase
Kratos’ common stock in the open market at prevailing market prices using a
portion of his share of the proceeds from the merger. Imperial Capital LLC
advised HBE and rendered a fairness opinion to the HBE board of directors in
connection with the approval of the transaction by the board. This transaction
is expected to close by the end of 2010.
“This transaction combines two leaders in the defense and
security solutions market, creating a great opportunity for our organization,
customers and shareholders,” stated Jim Henry, CEO of HBE. “As a much
larger organization, the combined company will be better able to establish a
presence in targeted markets with the potential for significant growth
opportunities, as well as enhanced service opportunities in certain key markets
and industries.”