Lockheed Martin acquires Aerojet Rocketdyne for $4.6 billion cash

Lockheed Martin today announced it has entered into a definitive agreement to acquire El Segundo, California-based aerospace company Aerojet Rocketdyne Holdings for $4.6 billion cash.  The transaction, which values the Aerojet at $56 per share in cash, is expected to be reduced to $51 per share after the payment of a pre-closing special dividend. This represents a post-dividend equity value of $4.6 billion and a total transaction value of $4.4 billion including the assumption of net cash.

According to the press statement, Lockheed said the acquisition will help to strengthen its position as a leading provider of technologies to deter threats and help secure the United States and its allies. As part of approving the transaction, Aerojet Rocketdyne announced a special cash dividend, revocable at its option through the payment date, of $5 per share to its holders of record of common stock and convertible senior notes (on an as-converted basis) as of the close of business on March 10, 2021, and payable on March 24, 2021.

Originally founded in 1890 by William F. O’Neil, Aerojet Rocketdyne is a rocket and missile propulsion manufacturer. Its subsidiary, Aerojet Rocketdyne was formed in 2013 when Aerojet (then owned by GenCorp) and Pratt & Whitney Rocketdyne were merged, following the latter’s acquisition by GenCorp from Pratt & Whitney. On April 27, 2015, the name of the holding company, GenCorp, was changed from GenCorp, Inc. to Aerojet Rocketdyne Holdings, Inc.

Commenting on the acquisition, James Taiclet, Lockheed Martin president and CEO, said: “Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer.”  Taiclet added: “This transaction enhances Lockheed Martin’s support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology. We look forward to welcoming their talented team and expanding Lockheed Martin’s position as the leading provider of 21st-century warfare solutions.”

With 2019 revenue of approximately $2 billion, nearly 5,000 employees, and 15 primary operations sites across the United States, Aerojet Rocketdyne is a world-recognized aerospace and defense rocket engine manufacturer. Aerojet Rocketdyne has deep customer relationships and significant demand for its innovative technologies.

The proposed acquisition adds substantial expertise in propulsion to Lockheed Martin’s portfolio and expands on the solid foundation built by Lockheed Martin and Aerojet Rocketdyne over many years. Aerojet Rocketdyne’s propulsion systems are already a key component of Lockheed Martin’s supply chain and several advanced systems across its Aeronautics, Missiles and Fire Control and Space business areas.

Headquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 110,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services.