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L-3 Communications to use revolver borrowings to help fund Vertex acquisition
By Sara Rosenberg
New York, Oct. 22 - L-3 Communications plans to use available borrowings under its revolver as well as cash on hand to fund the acquisition of Vertex Aerospace LLC from Veritas Capital for $650 million in cash.
The acquisition is expected to close in December and is subject to customary closing conditions.
"The Vertex acquisition will expand L-3's addressable market for aircraft modernization and maintenance when combined with L-3 Integrated Systems and L-3 Spar, and will also provide complementary service offerings for L-3's existing customers," said Frank C. Lanza, chairman and chief executive officer of L-3, in a news release.
"With this acquisition, L-3 broadens its participation in military aircraft modernization and maintenance, which is a significant part of the growing DoD (Department of Defense) O&M (Operations & Maintenance) budget. The operational and marketing synergies have been proven already, as demonstrated by the $2.7 billion contract award to an L-3/Vertex joint venture to maintain the training fleet at Fort Rucker used for primary and advanced systems flight instruction to prepare U.S. Army aircrews for deployment around the world. We believe this is the start of successful opportunities going forward."
Lehman Brothers Inc. served as the financial advisor to L-3 Communications on the acquisition.
L-3 Communications is a New York provider of intelligence, surveillance and reconnaissance systems, secure communications systems, aircraft modernization, training and government services and is a merchant supplier of a broad array of high technology products.
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