Elbit Systems acquires night vision activity from Harris for $ 350 million

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by Ifi Reporter Category:Financial Apr 6, 2019

Elbit Systems has signed a binding agreement to acquire night vision activity from Harris for $ 350 million in cash. Completion of the transaction is conditional upon approval of the merger between Harris and L3.
The merger will create the sixth largest security company in the US with a market cap of $ 34 billion.The merger, announced in October 2018, was approved last Thursday by the shareholders of both companies, but regulatory approvals are still required. Harris and L3, Harris was required to sell its night vision activity, with a sales turnover of $ 150 million a year.
The night vision division of Harris develops, manufactures and supplies night vision technologies to the US Army and the Federal Security and Homeland Security Forces, which will complete Elbit Systems' electro-optical operations, which are based in its subsidiary Elop, and will provide advanced technologies that Elbit Systems , As well as Harris' leading position in the night vision market for US security forces - in which Elbit Systems had a relatively small presence in Europe.
Harris develops night-vision goggles for ground and air forces based on thermal imaging and allows to operate under extreme conditions of low light and harsh visibility on the battlefield. Reflecting that Harris' night vision unit develops infantry soldiers combining a night vision system, a laminated reality and the ability to broadcast live video to a single system, which increases the soldier's ability to identify and analyze the situation and connect it to the battlefield management network.
Harris' night vision division is part of the company's communications division, which reported an operating profit of $ 571 million on a turnover of $ 1.9 billion in June of fiscal year 2018. This is a 30% operating profit, similar to the $ 1.75 billion in fiscal year 2017. Elbit Systems posted operating profit of $ 247 million in a turnover of $ 3 billion in 2018 - operating profit of 8.3% of turnover.
The acquisition of Harris 'night vision division is part of Elbit Systems' growth strategy, which is focused on the establishment and acquisition of subsidiaries in the world's largest markets in order to benefit from the increase in the defense budgets in these markets in view of the increase in the number and intensity of international disputes.
In November 2018, Elbit Systems completed the purchase of IMI from the State for $ 495 million in cash, and the consideration is conditional on future performance of $ 27 million. IMI acquired Elbit Systems in the field of active defense of armored combat vehicles through Arrow Arrow system, which won a $ 200 million contract to equip Bradley armored personnel carriers of a brigade in the US Army. The acquisition also created synergy with Elbit Systems' artillery division and created one of the world's three largest defense companies in the inland area, which is expected to reach $ 1 billion in 2019.

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