On Friday, Harris announced that it was acquiring Exelis in a deal valued around $4.75 billion. The cash and stock transaction is valued at $23.75 per share and is expected to close in June. The deal combines two military suppliers at a time when the pentagon is looking to reduce spending by $1 trillion over a decade.
Both companies have a significant presence in Rochester; Harris employs approximately 2,200 locally and Exelis almost 1,300. At the close of business on Friday Exelis shares finished up over 36 percent and Harris stock rose just under 10 percent. Exelis was originally part of Eastman Kodak before it was spun off to ITT in 2004, then in 2012 it was spun off again from ITT.
How this takeover will affect local workforces for both companies is unknown but Harris forecasts pretax cost savings between $100 million and $120 million as a result of this deal. Senator Charles Schumer reinforced that this marriage will create synergies for both companies and it is not anticipated that there will be any local job loss.
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).