28 May 2002
Eaton to sell Navy controls unit for $92.2M
Parsippany, N.J. - DRS Technologies Inc. said today it has signed a definitive agreement to acquire Eaton Corp.'s Navy Controls division (NCD) for $92.2 million in cash.
DRS said the transaction is expected to close by 30 June.
Located in Milwaukee, Wis., and Danbury, Conn., the NCD supplies high-performance power conversion and instrumentation and control systems for the U.S. Navy's combatant fleet, including nuclear-powered and conventionally-powered ships, in addition to specialized industrial customers.
Products include ship electric propulsion equipment, power electronics equipment, high-performance networks, shipboard control equipment and control panels, tactical displays and specialty reactor plant instrumentation and control equipment.
"In its first 12 months of operation under DRS ownership, NCD is expected to contribute approximately $90 million to annual sales and $0.20 to diluted earnings per share," said Mark S. Newman, DRS Technologies' CEO. "Few companies have the customer relationships, requisite technical capabilities and market presence as Eaton's Navy Controls Division.
"With a major installed base of electronic equipment in the fleet, NCD stands to benefit from the Navy's backfit, transformational conversion and modernization initiatives, as well as from new ship installation," Newman said.
The DRS executive said NCD has captured key positions on next generation programs, including the Virginia class submarine and the CVNX future aircraft carrier, and has played a significant role in promoting electric drive propulsion for the Navy's next new ship design, the DD-X. NCD also designed and built the power electronics equipment for the Navy's highly successful LSV2 scale model submarine, the first vessel to operate with modern high-performance electric drive equipment.
NCD employs approximately 600 people and is comprised of four major product lines: Navy Nuclear Systems, Ship Control Systems/Networks, Propulsion Systems and Industrial Systems.
Eaton said it made the decision to sell the business because it does not fit the company's long term strategic plan. "Navy Controls is a solid business, but its product lines and customer base are very different from Eaton's mainstream electrical power distribution business," said Randy Carson, senior vice president and group executive.
Parsippany, N.J-based DRS Technologies products and services are focused on defense electronics, including a broad range of mission critical systems and components for communications, combat systems, rugged computers, electro-optics, data storage, digital imaging, flight safety and space.
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